Giverny Capital Asset Management, LLC, an investment management company, recently published its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio returned -3.39% in the quarter, compared to a -4.27% return for the S&P 500 Total Return Index. For the year ended March 31, 2025, the fund returned 1.75% compared to an 8.25% return for the Index during the same period. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, Giverny Capital Asset Management highlighted stocks such as Builders FirstSource, Inc. (NYSE:BLDR). Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was 9.18%, and its shares lost 35.85% of their value over the last 52 weeks. On April 17, 2025, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $116.94 per share with a market capitalization of $13.3 billion.
Giverny Capital Asset Management stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its Q1 2025 investor letter:
“At the end of the quarter, we established a position in Builders FirstSource, Inc. (NYSE:BLDR), a building products distributor. We bought stock around $126 per share, while Wall Street analysts believe the company should earn nearly $10 per share this year. That feels like a good price for a company of this caliber.
Builders is a key support system for the nation’s homebuilders. It carries a wide range of products like lumber, millwork, windows and prefabricated components. Increasingly, it provides homebuilders with value-added services that help them build homes with less labor. For example, Builders can frame walls of a home at a central location and deliver panels to a job site for quick assembly. This reduces both labor and lumber waste on the job site and improves the home’s structural integrity. The US is likely to have long-term shortages of construction labor, so this off-site assembly creates considerable value and should become a common way to fabricate homes.
Builders is by far the largest value-added distributor with 590 branches around the country. It has procurement clout with lumber mills and others, and the sprawling branch network means it usually has lower freight costs to deliver materials to a job site…” (Click here to read the full text)
A crane lifting a truss during the construction of a new building.
Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the fourth quarter which was 55 in the previous quarter. Builders FirstSource, Inc.’s (NYSE:BLDR) fourth quarter sales were $3.8 billion, a decrease of 8% compared to Q4 2023. While we acknowledge the potential of Builders FirstSource, Inc. (NYSE:BLDR) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Builders FirstSource, Inc. (NYSE:BLDR) and discussed Black Bear Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.