Louisiana-Pacific Corp (NYSE:LPX)
A manufacturer and distributor of building products. The Company operates in three segments: Oriented Strand Board; Siding; and Engineered Wood Products.
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Warren Buffet pick
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Looks cheap, chart is trending upwards, housing market should be bottoming out by 2Q of 07, recent uptrend reflects that view.
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will turn quarter after housing turns. 4-6 quartrers of ugliness ahead followed by appreciation.
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These guys are board-heavy in their product line. APA recently cut expected production for panel products for 2007.
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Great management book value is close to stock value!!
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The housing market will swing back up eventually. When it does, LP will climb back up with it. IMHO the market is devaluing LP unfairly; houses aren't the only things built with wood.
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A value proposition
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More than 28% of price is supported by net cash. Business not expected to grow at a high rate over the next few years but has a low PE and pays a 3% dividend. Low payout ratio so room to pay out more. Looks like a bargain to me even if the business doesnt grow a bit over the next several years.
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Competitor for Trex. $2+B market cap
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