Does Builders FirstSource (BLDR) Have a Long-Term Tailwind for Growth?

Black Bear Value Partners, an investment management firm, published its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -7.1% in September and -1.0% in the quarter, and -12.7% YTD. The S&P 500 returned +3.6% September, +8.1% in the quarter, and +14.8% year-to-date. HFRI Value Index returned +1.3% in September, +5.9% in the quarter, and +13.7% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Black Bear Value Fund highlighted stocks such as Builders FirstSource, Inc. (NYSE:BLDR). Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was -11.61%, and its shares lost 32.44% of their value over the last 52 weeks. On October 8, 2025, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $129.54 per share, with a market capitalization of $14.32 billion.

Black Bear Value Fund stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its third quarter 2025 investor letter:

“Builders FirstSource, Inc. (NYSE:BLDR): There is a structural shortage of housing in the USA. Higher mortgage rates reduce the supply of existing home supply as homeowners are locked into low-rate mortgages. Homebuilders can buy-down the mortgage to a lower rate and accept a lower, yet still healthy margin on the home sale.

BLDR is a manufacturer and supplier of building materials with a focus on residential construction. Historically this business was cyclical with minimal pricing power as the primary products sold were lumber and other non-value-add housing materials. Since the GFC, BLDR has focused on growing their value-add business that is now 40%+ of the topline. The company has modest leverage and has been using their abundant free-cash-flow to buy over 45% of their stock in the last 33 months…” (Click here to read the full text)

Builders FirstSource (BLDR) Jumps 8.7% as Investors Scoop Up "Undervalued" Stocks

Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 74 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the second quarter, up from 58 in the previous quarter. Builders FirstSource, Inc.’s (NYSE:BLDR) second quarter sales decreased 5% to $4.2 billion. While we acknowledge the risk and potential of Builders FirstSource, Inc. (NYSE:BLDR) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Builders FirstSource, Inc. (NYSE:BLDR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Builders FirstSource, Inc. (NYSE:BLDR) and shared Sands Capital Global Growth Strategy’s views on the company. In its Q2 2025 investor letter, Black Bear Value Fund discussed the factors that contribute to the long-term growth of Builders FirstSource, Inc. (NYSE:BLDR). In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.