If You Invested $1000 in Louisiana-Pacific 10 Years Ago, This Is How Much You'd Have Now
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.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as 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
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Louisiana-Pacific, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in February 2012 would be worth $8,566.29, or a 756.63% gain, as of February 21, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 219.48% and gold's return of 3.57% over the same time frame.
Analysts are anticipating more upside for LPX.
Louisiana-Pacific's shares have outperformed the industry over the past year. The trend is likely to continue, given favorable OSB pricing and solid housing market momentum. The company has been reaping benefits from solid demand from the U.S. residential market. Also, strategic business transformation, effective cash management and inorganic moves are likely to boost its performance in future. However, higher freight and transport costs along with rising input costs are concerns. The company expects OSB revenues to fall 30% sequentially. That said, earnings estimates for the current year have moved north in the past two months, reflecting analysts' optimism surrounding its bottom-line growth potential.
The stock has jumped 7.71% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2021; the consensus estimate has moved up as well.
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