We came across a bullish thesis on Simpson Manufacturing Co., Inc. on X.com by @mastersinvest. In this article, we will summarize the bulls’ thesis on SSD. Simpson Manufacturing Co., Inc.’s share was trading at $209.21 as of February 12th. SSD’s trailing P/E was 25.39 according to Yahoo Finance.
Photo by Jens Behrmann on Unsplash
Simpson Manufacturing (SSD), a leader in structural building products, continues to demonstrate resilience and strategic positioning as it celebrates 70 years of growth and innovation. In 2025, the company achieved net sales of $2.3 billion, up 4.5% from 2024 despite a challenging housing market, with growth primarily driven by pricing (3%), acquisitions (1%), and favorable foreign exchange (1%), partially offset by a 1% decline in volume due to weaker housing starts.
Strategic cost-saving initiatives contributed to a 7% reduction in SG&A headcount, reflecting disciplined operational management. Simpson benefits from a highly fragmented end-customer base, with particularly significant exposure in California and Florida, where volumes have declined, but the company maintains roughly ten times the content in these regions compared to the U.S. average, creating substantial embedded opportunity as the residential market recovers. Programs with 25 of the top 30 national builders further strengthen their position, while national retail shipments saw only mid-single-digit declines, and point-of-sale volumes declined in the low single digits.
The company’s high-margin model provides leverage, allowing EPS growth to outpace revenue by 390 basis points in 2025, illustrating durability and operating efficiency. Q3 2025 results showed net sales up 6.2% year-over-year and adjusted EBITDA up 4.5%, though North American volumes were modestly lower, reflecting broader macro trends and stronger building codes in Southern and Western markets.
Over the past 30 years, SSD has delivered ~16% annualized returns, trades around 20x FY26 P/E, and has maintained an 18–26% ROE over the last five years, highlighting both its long-term value creation and ability to compound capital through market cycles. Overall, SSD’s combination of embedded market share, strong margins, and exposure to structural tailwinds makes it a compelling long-term investment with durable growth and resilient returns.
Previously, we covered a bullish thesis on Owens Corning (OC) by Brian Coughlin in January 2025, highlighting its leadership in insulation, roofing, and fiberglass composites, undervaluation at 9.6x EV/EBIT, and demand tailwinds from U.S. residential repair and remodeling. OC’s stock price has depreciated by approximately 27.98% since our coverage. @mastersinvest shares a similar perspective but emphasizes Simpson Manufacturing’s (SSD) high margins, embedded market share, and resilience in a fragmented residential market.
Simpson Manufacturing Co., Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held SSD at the end of the third quarter which was 38 in the previous quarter. While we acknowledge the risk and potential of SSD 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 SSD and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
