Boise Cascade (BCC) to Open New Door Shop Facility in Colorado
Boise Cascade Company BCC is set to open a new state-of-the-art door shop facility in the Commerce City, CO.
The 127,000 sq. ft. facility will enable the company to expand its product offerings of pre-hung doors and other millwork products. The facility, which is slated to be complete in the fourth quarter of 2023, is expected to begin production after the first of the year.
Boise Cascade is optimistic about the new millwork facility as this opening complements its distribution business, portraying strong growth prospects.
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Shares of BCC gained 46.5% in the year-to-date period, compared with the Zacks Building Products - Wood industry’s 9.2% growth.
BMD Segment, a Major Growth Driver
Boise Cascade’s focus on its Building Materials Distribution (BMD) segment to drive its growth momentum has been faring well, given the segment contributed 78.4% to the total 2022 revenues. For the segment, the crucial growth strategy opted by the company includes adding products and services, expanding its market penetration through acquisition or through the opening or expansion of locations in under-served markets, as well as identifying and executing upon adjacent distribution platforms that can be scaled.
The BMD segment considers accretive buyouts as a primary strategy to expand distribution facilities and strengthen production portfolio, thus facilitating growth. On Aug 23, 2023, the company announced the acquisition of Brockway-Smith Company, a leading wholesale distributor specializing in doors and millwork, for $172 million. The hand over is expected to be complete by the early fourth quarter. This acquisition will increase the production capacity as well as the millwork business, thus strengthening BCC’s BMD segment.
Furthermore, on May 9, the segment acquired a five-acre site in Birmingham, AL, portraying the company’s ability to fulfill the growing demand for its engineered wood products as well as specialty building products and commodities.
During second-quarter 2023, the BMD segment reported net sales of $1.64 billion, portraying sequential growth of 18.8%, on the back of improved housing market conditions. For the third quarter of 2023, the company expects the segment’s sales to improve further based on the strong daily average sales, product mix and favorable pricing.
Zacks Rank
Boise Cascade currently sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some other top-ranked stocks from the Construction sector are EMCOR Group, Inc. EME, TopBuild Corp. BLD and Fluor Corporation FLR.
EMCOR currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
EME delivered a trailing four-quarter earnings surprise of 17.2%, on average. Shares of the company have risen 82.1% in the past year. The Zacks Consensus Estimate for EME’s 2023 sales and earnings per share (EPS) indicates growth of 11.5% and 36.2%, respectively, from the previous year’s reported levels.
TopBuild currently sports a Zacks Rank of 1. BLD delivered a trailing four-quarter earnings surprise of 14.1%, on average. Shares of the company have risen 57.1% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates growth of 3.3% and 6.1%, respectively, from the previous year’s reported levels.
Fluor currently sports a Zacks Rank of 1. FLR delivered a trailing four-quarter negative earnings surprise of 5.3%, on average. Shares of the company have gained 29.8% in the past year.
The Zacks Consensus Estimate for FLR’s 2023 sales and EPS indicates growth of 11.3% and 141.5%, respectively, from the previous year’s reported levels.
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