If you like fundamentally boring businesses, Encore Wire (NASDAQ:WIRE)
should be up your alley. While there's actually a lot that goes into
making and maintaining a top business in the space, electrical wiring
for residential, commercial, and industrial construction isn't the sort
of business that is going to get a lot of attention. Nevertheless,
Encore Wire has managed to blend strict operational discipline with a
surprising amount of innovation into a solid company within this
overlooked sector.
As is the case with so many
stocks now, the post-election rally has made this a problematic stock
from a valuation perspective. Even my more aggressive methodologies top
out in the mid-$40s for fair value, making this an iffy prospect for
serious outperformance. That said, I really admire how management runs
this company, and if you can live with the volatility of a business tied
to the cyclical construction market(s) and commodity input prices, it
is a name worth considering at a better price.
Continue here:
Behind Encore Wire's Sometimes Messy Numbers Is A Good Company
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