2. Louisiana-Pacific Corporation (NYSE:LPX)
Number of Hedge Fund Holders: 39
Louisiana-Pacific Corporation (NYSE:LPX) is a leading manufacturer of engineered wood products, catering to builders, remodelers, and homeowners around the globe. The company operates 22 plants in the US, Canada, Chile, and Brazil, offering a wide range of products including siding solutions, structural solutions, and oriented strand board (OSB). Louisiana-Pacific Corporation (NYSE:LPX) ranks among the best lumber stocks to invest in.
In the third quarter of 2024, the corporation reported a slight decline in net sales, down by $6 million or 1% compared to the previous year. However, siding revenue saw a significant increase of $76 million, or 22%, driven by a 15% rise in volume and a 6% increase in prices. This growth in siding sales highlights Louisiana-Pacific Corporation’s (NYSE:LPX) ability to adapt and thrive in changing market conditions.
The company generated $153 million in EBITDA, which translated into $184 million in operating cash flow. Louisiana-Pacific Corporation (NYSE:LPX) strategically invested $44 million in capital expenditures during the third quarter while also returning $91 million to shareholders through dividends and share repurchases in the same quarter. As of September 30, 2024, the company maintained nearly $900 million in liquidity and a robust balance sheet.
The commitment to returning value to shareholders while investing in growth initiatives positions Louisiana-Pacific Corporation (NYSE:LPX) as a strong player in the lumber market. As of the third quarter of 2024, LPX was held by 39 hedge funds, according to Insider Monkey’s database. SouthernSun Asset Management, LLC stated the following regarding Louisiana-Pacific Corporation (NYSE:LPX) in its “SouthernSun Small Cap Strategy” third quarter 2024 investor letter:
“Louisiana-Pacific Corporation (NYSE:LPX) was the top contributor in the Small Cap strategy in the third quarter. LPX is a market leader in the manufacturing of engineered wood siding and oriented strand board (OSB). The company’s siding products have been on a secular growth trend, taking share from other forms of siding in recent years due to a superior value proposition tied to factors such as aesthetics, ease of use, and quality. During the second quarter, LPX siding sales performed strongly and management increased 2024 segment guidance. Market data suggests the company is gaining share from vinyl and other siding products in the new builder, repair and remodel, and retail channels, and has a long-term opportunity to continue this trend. The company’s OSB assets and leading market position remain an important component of the company’s long-term value. The largest use for OSB is sheathing for residential new construction, and thus demand for OSB is correlated with housing starts. OSB prices are largely dependent on supply and demand dynamics within the industry. During the second quarter, prices were relatively strong, which combined with strong operating performance by the company, led to strong profits. Management expects lower prices and thus lower OSB profits in the third quarter. Overall, we believe recent performance underscores the quality of the company’s assets and management’s skill, and we continue to expect satisfactory long-term results as shareholders.”
