This Lesser-Known Industrial Products Company is Red-Hot -- Will it Continue?
BlueLinx Holdings (NYSE: BXC) is a wholesale distributor of materials for residential and commercial construction projects that is certainly benefiting from the housing boom. Due to the nature of its business, the company's fortunes are tied indirectly to the supply and demand dynamics in the housing market. Bluelinx provides the materials homebuilders use to construct and renovate real estate and in some ways, it has been viewed as a proxy for the real estate market.
Shareholders have watched this stock soar since mid-2020 due to the housing shortage that has pushed home prices to record levels. In fact, shares are up nearly 100% over the past year and more than 500% over the past five years.
Material suppliers like Bluelinx have been hot on investors' lips lately because of the recent spike that caused lumber prices to hike more than 1000% due to supply shortages and surging demand. This stellar move along with wider commodity price hikes drove a record quarterly performance that saw net sales of $1.3 billion, an 87% improvement, record net income, and a gross margin at a stellar 19.2%. The recent performances have put the company in a strong liquidity position and the company has already expressed interest in bolstering its M&A capabilities and reducing debt.
Source Fool.com
