LBM guys take Wall Street
For stock market advice, I always turn to my dad. He's not a stockbroker. But he has watched almost every episode of "Wall Street Week" since the mid-1970s. Now that he's retired, he sometimes watches the same episode of "Mad Money" twice in the same day. (The hands-down superiority of Louis Rukeyser over Jim Cramer will be discussed in a future editorial.)
Here's what my dad said about newly public Boise Cascade: "I like companies with tangible products — like building materials."
Take that, Facebook! And chalk one up for old-fashioned building materials distribution.
Boise Cascade's initial public offering was a shining success. Just look at the numbers.
Last month, the Boise, Idaho-based building material manufacturer and distributor offered shares of BCC on the New York Stock Exchange for $21 per share. They shot up 24.5% on the first day, and they've risen almost every day since, reaching a high of $34.54.
Facebook, as you remember, launched its own IPO back in May 2012. How did it go? Not very well. In fact, a trading curb kicked in to break the fall of the stock price. Lawsuits and finger pointing continue to this day, as the stock dwells well below its initial offering price.
[Note to Facebook fans who point out that FB's market capitalization of $67.5 billion dwarfs BCC's market capitalization of $1.16 billion: Remember Myspace.com?>
BCC wasn't the only long-on-home building IPO in recent days. Home builder TRI Point went public and saw its shares jump 12% on its first day of trading on Jan. 31.
Maybe we've turned a corner from an economy of software and social media to an economy of tangible building products. I like to think so.
I also like to think that the Wall Street success of companies like BCC is a victory for LBM guys. They don't deliver online user experiences; they deliver trucks full of lumber. Real estate to them isn't a square inch on a home page — it's a 30-acre yard near a railroad.
And it's not just my dad who's bullish on BCC. Analysts are near unanimous in their view that the timing is ideal for a building material company to go public. Anyone who makes, sells or distributes building products has to feel encouraged.
Wall Street seems to like the company, and its entire sector. It's about time.
"Take that, Facebook. And chalk one up for old-fashioned building materials distribution."
