5 Stocks Hedge Funds Are Talking About Right Now

4. Builders FirstSource, Inc. (NYSE:BLDR)

2024 performance: 9.08%

Number of Hedge Fund Holdings: 61

Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a manufacturer and supplier of building materials, manufactured components, and construction services. It is trading at $177.03 per share on 19 April 2024 and has a market capitalization of $21.587 billion. The company reported a 24.8% decrease in revenue in 2023 compared to 2022. An increase in interest rates and a general slowdown in the market affected sales in 2023. Investors love BLDR because of its strong financials, the potential for a high multiple, and steady profit growth, even though interest rate swings have an impact on the company.

Black Bear Value Partners stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its first quarter 2024 investor letter:

“We have a high-class problem with Builders FirstSource, Inc. (NYSE:BLDR). On the one hand we largely bought the business ~$50 a share and today it’s trading north of $200. Part of the appreciation is directly related to the Company’s buyback (thank you management team!). We own more of the company without having to put out additional capital. But before we take victory laps let’s stay objective as it remains a top 5 position. Note I still think BLDR is cheap.

One of the harder aspects of investing is knowing when to sell, especially when a business has performed wonderfully. There are many thoughts from smart people who contradict each other. Should you sell a business when it hits “fair value”? What about the tax implications? Should you trim along the way and buy what’s not going up? Some would call this pulling your flowers to water your weeds…” (Click here to read the full text)