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Insiders Active in Building Products Leader

by | Nov 22, 2021

Louisiana Pacific (LPX) nice weekly flag setting up near all-time highs and notable open market buy on 11/16 from the CEO of $360K in stock at $67.24. A breakout move above $74-$75 has room to run to $100 and continuation of the big longer-term move off the March 2020 lows. We saw a bullish MACD cross on the weekly recently and RSI is starting to work out of a narrow range, plenty of room to run. The $6B company trades 9X earnings, 1.36X sales, and 4.36X FCF. LPX is a leading manufacturer of building products for new home construction and remodels across Siding, Oriented Strand Board (OSB), and Engineered Wood Products (EWP). The company has been shifting more of their overall mix towards siding which continues to see near 20% growth with volumes 3X the prior year in Q3. The company has been successfully executing on capacity expansion projects to meet rising demand while also strengthening partnerships with partners like Home Depot. Analysts have an average target for shares of $74 with a Street High $100. Goldman starting at Sell in July seeing wood products facing near-term pressures. As capacity ramps and input costs decline, along with near-term moderation in consumer demand, lumber and related commodity prices prices should adjust lower. BMO positive on the name given the rise in OSB pricing and a growth in its Siding business. RBC with a $100 PT as their ongoing and accelerating transformation to a Siding producer should result in steady low-double-digit rates of growth. LPX has seen other insider buying in 2021 too. In August, a director bought $100K in stock at $56.24 and in the CFO bought $700K in stock at $56. Hedge fund ownership fell 2%. Short interest is 5%.

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