CD&R Investment Associates, a major holder of
Beacon Roofing Supply (BECN), recently added 103,931 shares to their holdings. The buy increased the fund’s holdings by 0.7 percent, and came to a total purchase price just under $6 million.
This marks the third buy from this fund so far this year. The other two prior buys have also been for about $6 million as well. A few company executives have been modest sellers of shares this year.
Overall, company insiders own about 0.5 percent of shares. Institutions own all outstanding shares.
The roofing supply company is up about 12 percent in the past year. Revenue is up nearly 30 percent, and shares are still inexpensive at under 10 times forward earnings.
Action to take: The stock is poised for a potential jump higher in the coming months, particularly if a hurricane creates a surge in demand for roofing products. At present, shares don’t pay a dividend, so investors won’t get paid to wait.
For traders, the January 2023 $65 calls, last going for about $3.40, could deliver mid-double-digit gains in the months ahead. This would be a less expensive way to bet on a rise in demand for roofing products as hurricane season plays out. If it does play out, traders should look to close the option out well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.