01. Louisiana-Pacific Corporation (NYSE:LPX)
Number of Hedge Fund Holders: 48
Louisiana-Pacific Corporation (NYSE:LPX), along with its subsidiaries, provides building solutions for new home construction, repair, remodeling, and outdoor structures. The company operates through the Siding, Oriented Strand Board, LP South America, and Other segments. In the latest earnings report announced on May 8, Louisiana-Pacific Corporation (NYSE:LPX) reported a normalized EPS of $1.53, beating expectations by $0.41. Revenue was $724.00 million, surpassing projections by $37.16 million. The company’s forward dividend yield is 1.07%, with an annual payout of $1.04 and a payout ratio of 22.22%. The five-year dividend growth rate is 13.54%, and the dividend has grown consistently for five years. The forward P/E ratio is 17.88, suggesting a reasonable valuation. Year-to-date, the stock has returned 37.07%, significantly outperforming the S&P 500’s 14.54% return.
In the first quarter of 2024, the number of hedge funds with stakes in Louisiana-Pacific Corporation (NYSE:LPX) increased to 48 from 41 in the previous quarter, according to Insider Monkey’s database of 920 hedge funds. The combined value of these stakes is approximately $1396.27 million. Warren Buffett’s Berkshire Hathaway emerged as the largest stakeholder among these hedge funds during this period.
Cooper Investors Global Equities Fund stated the following regarding Louisiana-Pacific Corporation (NYSE:LPX) in its first quarter 2024 investor letter:
“Highlights are often the private site tours we undertake with portfolio companies, two worth discussing on this trip were with Louisiana-Pacific Corporation (NYSE:LPX) and Eurofins Scientific (Eurofins). LP is a business we invested in mid-2023 and represents a Low-Risk Turnaround where the proposition is a commodity-to-specialty transformation story. The company is a leading manufacturer of wood-based building materials produced from its 24 mills and finishing plants, comprising ~4bn sq. ft of Oriented Strand Board (OSB) capacity and ~2bn sq. ft of siding capacity. Historically, OSB was the core output of LP but is a commoditised product in which LP is a price-taker. Group profits and losses swung around and led to highly volatile earnings over the years for a business at the whim of the underlying OSB price.
Siding on the other hand is a genuinely differentiated product that gives LP pricing power and generates consistent incremental margins of 25-30%. Made in the same mills as OSB using engineered wood flake and embossed with a grain finish (a processing marvel we’ve witnessed first-hand at a Source: Company Disclosures, Redburn Atlantic mill in Upper Michigan), LP ‘Smartside’ is a sustainable way to wrap homes in an attractive durable substrate that is gaining popularity among small and medium builders…” (Click here to read the full text)
LPX tops our list of best consulting stocks. However, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LPX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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