Wood building products manufacturer Louisiana-Pacific (LPX)
is having a tough time of it, as residential housing has been in a
slow, erratic recovery and competitive OSB supply returns to the market.
Making matters worse, regulators have not gone along with the company's
contemplated acquisition of Ainsworth (OTCPK:ANSBF).
Between poor OSB pricing and worries about the merger going through,
Louisiana-Pacific shares have been left behind by other residential
housing plays like Headwaters (HW), Stock Building Supply (STCK), and Universal Forest Products (UFPI).
LP
still looks undervalued, but it's harder case to make. OSB pricing has
shown signs of life and a pickup in residential building should be a
"when, not if" question. An inability to close a value-creating deal
with Ainsworth would likewise be a meaningful setback. Stripping the
Ainsworth deal out, a key part of why I wrote LP as a Top Idea in September,
I still believe that fair value for these shares is in the high teens,
but it's hard to keep making a call based around patiently waiting for
better operating conditions.
Read the full article here:
Louisiana-Pacific Hit With Weak Pricing And Trouble With Regulators
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