PebbledsPicks (66.74)

September 2010: Simpson Manufacturing Co., Inc. (SSD)

September 01, 2010 – Comments (0) | RELATED TICKERS: SSD

Simpson Manufacturing Co., Inc., through its subsidiaries, engages in the design, engineering, manufacture, and sale of building products. The company offers wood-to-wood, wood-to-concrete, and wood-to-masonry connectors; screw fastening systems and collated screws; stainless steel fasteners; and pre-fabricated shear walls. It also provides adhesives, mechanical anchors, carbide drill bits, and powder actuated tools for the concrete, masonry, and steel markets. In addition, the company offers venting systems for gas, wood, oil, pellet, and other alternative fuel burning appliances. Simpson Manufacturing Co. markets its products for the residential construction, light industrial and commercial construction, remodeling, and do-it-yourself markets in the United States, Europe, Canada, Asia, Australia, New Zealand, Mexico, and other countries in central and South America and the Middle East. It distributes its products to home centers through wholesale distributors, contractors and dealers, and original equipment manufacturers. The company was founded in 1956 and is based in Pleasanton, California.

Comments: I've been away from PebbledsPicks for a few months and now come back to a previous pick. The market seems to be stuck in a range and I am fearful we're in for a major 10+% correction from today's levels, which would send SSD down probably 20%.  However, I need to get back in the game with PebbledsPicks, and so I once again pick long term winner Simpson Manufacturing. This time I've got money in the real world riding on this company at today's price.

Simpson is a case study in moats. They have a huge array of products and customers, and many products are the #1 choice of engineers (sometimes the only choice) given strict building codes. The stock is not currently cheap based on where the industry has been recently, but stocks are not about the past they're about the future. New home construction has dropped off a cliff, and several people smarter than me think it's simply a matter of time before building picks up to meet historical demand for new homes.

Simpson has a growing cash pile, no debt, awesome long-term management, and is growing international revenues at a swift pace. And, oh yeah, SSD sports a decent dividend that has grown. Another reason to buy this stock is their growing international share of revenue. I think in their most recently reported quarter they are up to 28% of revenues from international sources. This stock is also a favorite in Fooldom havning been picked by both Hidden Gems and Stock Advisor.

With this pick I plan to be in it for the long haul.