* We are taking advantage of Builder FirstSource shares being oversold to add to this new holding.
| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
BLDR | Buy | 270 | 136 | 650 | 2.0 |
After you receive this Alert, we will buy 270 shares of Builders FirstSource (BLDR) at or near $136. Following the trade, BLDR shares will account for roughly 2.0% of the portfolio's assets.
We are stepping up to the plate and adding to the portfolio’s position in Builders FirstSource. BLDR shares have been pressured this week following a price target cut at Wedbush to $175 from $215 given the firm’s somewhat dimmer view of single-family housing starts and new home sales prospects. We can’t speak to what they were thinking about rate cuts earlier in the year, but as you know we’ve based our BLDR thinking on one rate cut in 2024 and the likelihood of a few more next year.
To us, the BLDR story is tied to homebuilders streamlining their operations, embracing BLDR's value-added products, and the improving outlook for the overall housing market as the Fed returns to a more neutral monetary policy from where it is today. Recent data have shown further progress on inflation, and the Flash June PMI data from S&P Global points to more on its way.
This latest move lower has pulled BLDR shares into oversold territory, and even Wedbush kept its rating at "Outperform" given the almost 30% upside to its target. Those factors, along with the improving non-seasonally adjusted May data for single-family housing starts and existing home sales as well as rising deliveries from Lennar (LEN) and other homebuilders, are leading us to scoop up more shares. This move will help reduce the portfolio’s average cost basis by several points.
More Pro Portfolio:
- We Are Calling Up a New Portfolio Position From the Bullpen
- Weekly Roundup: Prepare to Be Selective
- Signals From Our Investing Notebook
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long BLDR.