Into the Woods: Boise Cascade

05/11/2017 2:50 am EST

Focus: STOCKS

Crista Huff

Editor, Cabot Undervalued Stocks Advisor

Wood products company Boise Cascade (BCC) reported a big first quarter earnings beat, notes growth and income specialist Crista Huff, editor of Cabot Undervalued Stocks Advisor.

Boise Cascade far surpassed its quarterly profit expectations. The market expected $0.09 EPS, but Boise bested that number with $0.26 per share. Meanwhile, revenue came in at $974.4 million vs. the consensus estimate of $966.3 million.

The company is expecting a good 2017 due to continued increases in single-family and multi-family housing starts.

At this point, we could see analysts raise estimates to reflect 75% profit growth in 2017, while the P/E is down below $20. The stock is extremely undervalued based on both 2017 and 2018 numbers.

Based on previous trading patterns, we could see BCC get stuck at $32 during the current uptrend. When it surpasses $32, there’s no major price resistance until it reaches $39.

 If you’re looking to optimize your purchase price, I think you’re best case scenario will be a pullback to $30. Strong Buy.

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