CD&R Investment Associates, a major holder of Beacon Roofing Supply Inc (BECN), recently added 107,185 shares. The buy came to a total cost just under $6 million, and increased the fund’s sake by about 1 percent.
The fund last made a buy, also for about $6 million, back in October. Since then, one company division president started a 9,009 share stake, paying about $500,000. And one company EVP was a seller of shares back in November.
Overall, company insiders own 0.4 percent of shares, and institutions own nearly all of the remaining outstanding shares, indicating a tight supply available for retail investors.
The roofing supply company’s shares have traded flat over the past year, significantly outperforming the overall stock market. That was assisted by a 29 percent rise in revenues over the past year, and by a 48 percent rise in earnings.
Action to take: The stock is still reasonably valued at about 10 times earnings. Shares are well positioned for a rebound in real estate activity following last year’s slowdown. Investors may like shares at current prices or on a drop, although the stock does not pay a dividend.
For traders, the April $60 calls are an at-the-money trade. Last going for about $3.00, traders can likely see mid-double-digit gains in the coming months.
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.