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Here's How Much You'd Have If You Invested $1000 in Louisiana-Pacific a Decade Ago

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Zacks Equity Research
·3 min read
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For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Louisiana-Pacific (LPX) ten years ago? It may not have been easy to hold on to LPX for all that time, but if you did, how much would your investment be worth today?

Louisiana-Pacific's Business In-Depth

With that in mind, let's take a look at Louisiana-Pacific's main business drivers.

Louisiana-Pacific Corporation is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction. Currently, the company operates 20 moderns, strategically located facilities in the United States and Canada, two facilities in Chile and one facility in Brazil. It also operates facilities through a joint venture. The company’s products are used primarily in new home construction, repair as well as remodeling and outdoor structures.

The company has four reportable segments — Siding (contributing 34.4% of 2020 net sales), Oriented Strand Board or OSB (43.8%), Engineered Wood Products or EWP (14%) and South America (6.1%). Notably, revenues from Other sources and Inter-segment sales accounted for 1.8% of its total net sales.

Siding segment consists of LP SmartSide trim and siding, as well as LP Outdoor Building Solutions innovative products for premium outdoor buildings.

OSB segment manufactures and distributes OSB structural panel products including LP OSB, LP TechShield radiant barrier, LP TopNotch sub-flooring, LP Legacy super tough, moisture-resistant sub-flooring, LP WeatherLogic air & water barrier and LP FlameBlock fire-rated sheathing.

EWP segment comprises LP SolidStart I-Joist (IJ), Laminated Veneer Lumber (LVL) and Laminated Strand Lumber (LSL) and other related products.

South America segment manufactures and distributes OSB and siding products in South America and certain export markets.South America segment manufactures and distributes OSB and siding products in South America and certain export markets.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Louisiana-Pacific ten years ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in April 2011 would be worth $7,071.35, or a gain of 607.14%, as of April 15, 2021, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 213.78% and gold's return of 12.18% over the same time frame.

Looking ahead, analysts are expecting more upside for LPX.

Louisiana-Pacific's shares have outperformed the industry over the past six months. Also, bottom-line estimates for 2021 have increased over the past 30 days, depicting analysts’ optimism surrounding the company’s earnings growth potential. In 2020, it achieved 20.7% and 273.7% growth in net revenues and adjusted EBITDA, respectively, on a year-over-year basis. Solid repair and remodeling activities along with ample liquidity have been facilitating the company to tide over the pandemic. Moreover, strong SmartSide strand performance, increase in OSB pricing, favorable resin costs, operational efficiency, cost-containment efforts and resilient housing market prospects will likely enable it to drive growth. However, weakness in the EWP unit, and higher input costs and expenses have been pressing concerns.

Over the past four weeks, shares have rallied 17.43%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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