Several years after the rupture of the housing market, there is still no joy among the companies that supply building materials. True, many product markets have stabilized, but investors rarely get very excited about "less worse". As a leading supplier of an increasingly popular building material, Louisiana-Pacific (NYSE: LPX) should see a very strong rebound in margins and stock performance when homebuilding picks up, but the stock could be dead money until and unless that happens. (For more, see 8 Signs Your Neighborhood Is On The Upswing.)
Q1 Results - Good, Bad and Ugly
Investors were not overly thrilled with LPX's first
quarter results, as the company's loss was quite a bit worse than analysts had forecast. It was not all bad news, though.
Revenue rose 12% this quarter versus a year ago, mostly on the strength of siding and oriented strand board (OSB). Given that
housing starts dropped about 10% during the first quarter versus the year ago quarter, that is a pretty impressive performance. In OSB (oriented strand board), LPX saw 18% volume growth as more and more builders choose OSB over plywood.
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http://stocks.investopedia.com/stock-analysis/2011/Looking-For-Reorientation-On-Louisiana-Pacific-LPX-WY-UFPI-RYN-PCL0512.aspx
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