BlueLinx Holdings (BXC) Stock Has Growth Potential: Alluvial Capital
Published on June 17, 2018 at 11:49 am by
M.Nadeem
in News
Share
Alluvial Capital Management discussed BlueLinx Holdings Inc. (NYSE: BXC) in its Q1 investor letter. The firm expects BlueLinx shares to rise “as market awareness grows and the company achieves its projected cost savings.” Let’s take a look at Alluvial Capital’s thoughts on BXC.
BlueLinx is a new, but relatively large holding for Alluvial Fund. BlueLinx is a building products distributor. The company supplies homebuilders, contractors, and dealers and retailers like Home Depot and 84 Lumber with all manner of materials, mainly for use in home exteriors. As a distributor, BlueLinx compensates for its structurally low margins by attempting to minimize its working capital investment and economizing wherever possible on delivery and service costs.
BlueLinx has just acquired a competitor, Cedar Creek. With the purchase, Bluelinx has nearly doubled in size and will enjoy greater purchasing power and a more efficient distribution network. The company believes the transaction will create at least $50 million in annual savings. The company took on debt to complete the acquisition of Cedar Creek but will pay down this debt rapidly by selling or performing sale-and-leasebacks on the company’s substantial real estate holdings. BlueLinx owns many of its distribution centers outright, and estimates these sites are worth $150-160 million. The company will not owe tax on the proceeds from the sale of these parcels due to accumulated net operating losses.
I believe BlueLinx is capable of earning at least $8 per share in 2019, and perhaps far more if housing starts rise to average historical levels. Even after the purchase of Cedar Creek, BlueLinx remains a small company with a low profile. Shares soared following the announcement of the Cedar Creek acquisition, but I expect them to rise further as market awareness grows and the company achieves its projected cost savings.
BlueLinx Holdings Inc. (NYSE: BXC) is a wholesale distributor of building and industrial products in the United States. The company booked a loss of $13.4 million for the fiscal first quarter of fiscal 2018, versus net income of $0.6 million in the prior fiscal year same quarter. It generated net sales of $437.5 million for the quarter, up $8.9 million from the prior-year first quarter.
On the share market, BlueLinx has been performing well since February. Over the past three months, the stock gained 26.63%, while the share price jumped whopping 309.39% over the past 12 months.
Meanwhile, BXC isn’t a very popular stock among hedge funds covered by Insider Monkey. As of the end of 2017, there were only nine funds in our database with positions in the company.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.
And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.
What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.
In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.
And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…
This prediction might not be bold at all:
A few years from now, you’ll wish you’d owned this stock.
The best part? You can discover everything about this company and its groundbreaking technology right now.
I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.
Trust me — you’ll want to read this report before putting another dollar into any tech stock.
For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!
Here’s why this is a deal you can’t afford to pass up:
• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.
• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.
• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149
• Bonus Reports: Premium access to members-only fund manager video interviews
• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.
• 30-Day Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.
If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.
Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.
Here’s what to do next:
1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.
2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.
3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.
Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!
