5 Best Construction Stocks To Buy Now

1. Builders FirstSource, Inc. (NYSE:BLDR)

Number of Hedge Fund Holders: 53

Builders FirstSource, Inc. (NYSE:BLDR) is a Texas-based company that manufactures and supplies building materials, manufactured components, and construction services in the United States. On November 8, Builders FirstSource, Inc. (NYSE:BLDR) reported a Q3 non-GAAP EPS of $5.20 and a revenue of $5.8 billion, outperforming market estimates by $1.90 and $500 million, respectively. The company ended Q3 2022 with a strong liquidity position of $1.3 billion. 

On November 11, Deutsche Bank analyst Joe Ahlersmeyer maintained a Buy recommendation on Builders FirstSource, Inc. (NYSE:BLDR) but slashed the price target on the shares to $72 from $85 following the Q3 results.

According to the second quarter database of Insider Monkey, 53 hedge funds were long Builders FirstSource, Inc. (NYSE:BLDR), compared to 57 funds in the prior quarter. Coliseum Capital held the biggest stake in the company, comprising 6.46 million shares worth $347 million.

Praetorian Capital made the following comment about Builders FirstSource, Inc. (NYSE:BLDR) in its Q3 2022 investor letter:

“Builders FirstSource, Inc. (NYSE:BLDR) produces and distributes building materials, primarily for the home building industry. It trades at a low-single digit cash flow multiple on recent earnings and is using that cash flow to rapidly repurchase shares. One could say that the low multiple is due to peak cyclical earnings. I take a different view and believe that we’re in the early stages of a long-term housing boom caused by migration to low tax states along with a catch-up phase as home construction rates were below trendline over the past decade. I believe that the US needs in excess of 1 million new single-family homes each year, just to provide for population growth, ignoring the other factors. As a result, this business does not appear to be at peak earnings; instead, I believe we are seeing a new baseline for earnings—though the earnings will be quite volatile—particularly if interest rates remain elevated or increase further.”

You can also take a look at 10 Best Stock Market Sleeper Stocks to Buy and 10 Best Railroad Stocks To Buy. 

Follow Insider Monkey on Twitter