Buy JELD
The Stock: JELD-WEN Holding Inc.
The Ticker: JELD
The Trade:
Purchasing shares:
Buy shares of JELD up to $30. Do not set a stop yet. Low price target: $31 High price target: $45. We will consider current prices of $22.51 to be our entry price for the stock. If the stock drops below $20, I recommend selling it.
Trade Notes:
Recently, the best results for stocks have resulted from three characteristics… Stocks that have:
Good and improving fundamentals
A “discount” or margin of safety between its current price and the price target implied by my proprietary valuation models
A strong macroeconomic catalyst that no one seems to be paying attention to yet.
By buying stocks with these three simple characteristics, the portfolio continues to do exceptionally well in the environment, where money has been rotating out of tech stocks and into small cap value stocks.
Today’s trade, JELD-WEN, has all my favorite characteristics of a good company — both to trade and to hold long term.
JELD is a North Carolina company that makes doors and windows. It is exactly the kind of “boring” company that people ignore, even though it is growing quite rapidly.
The company has strong and improving fundamentals, including 64% year-over-year growth in its earnings, enough money to easily cover current liabilities and grow the business, and a return on equity that’s absolutely exploded in the last year.
Based on historical valuations and its growth rate over the last few years, JELD looks significantly undervalued — possibly by as much as 42%.
And because it makes a product necessary for new homes, it looks like the company will continue to be bolstered by the growing number of new houses being built in the U.S. right now, which you can see in the chart below:
Simply put, as long as macroeconomic conditions continue as they are and as long as JELD continues to improve its fundamentals, it looks like this company will benefit shareholders for the foreseeable future.
Company Info:
JELD-WEN Holding, Inc. is engaged in door and window manufacturing. The company design, produce and distribute interior and exterior doors, windows, and related products. The products are used in the new construction of residential single and multi-family homes and non-residential buildings. The firm's operating segments are North America, Europe, and Australasia. It generates a majority of its revenue from North America.
Key Stats:
Market Cap $2,556,442,700
HQ United States
Sector Industrials
Industry Building Products & Equipment
Exchange NYSE
Relevant Company Financials:
JELD caught my attention due to the steady increase of its profit margin in recent quarters. Additionally, its revenue has been increasing sustainably while it has been maintaining a reasonably low debt ratio.
Sources:
https://ycharts.com/companies/JELD/eps_growth
https://ycharts.com/companies/JELD/current_ratio
https://ycharts.com/companies/JELD/return_on_equity
https://ycharts.com/companies/JELD/debt_equity_ratio
https://ycharts.com/companies/JELD/normalized_eps_ttm
https://ycharts.com/companies/JELD/return_on_equity
https://ycharts.com/companies/JELD/profit_margin_ttm
https://ycharts.com/companies/JELD/revenues_ttm
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