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BlueLinx - taking a long term view
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i4value
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30-May-2023 06:31
Yells: "i4value.asia" |
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Blue Linx is a US wood-based company. There is a strong correlation between BXC revenue and US Housing Starts. Housing Starts is cyclical and BXC should be analyzed and valued as a cyclical company. While BXC past 2 years&rsquo performance has been record-breaking, it does not represent its performance over the cycle. The real valuation challenge is then what to use as the cyclical values. If you use the historical averages, there is no margin of safety. &zwnj 
But if you use some projected values, you can have a margin of safety. The real question is whether it is appropriate to use such projected values for cyclical companies. I hope the infographics can provide some insights. If you want to see infographics of other companies, go to Are these outstanding stocks - what to consider? (Other Stock Exchanges) |
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