Eric DeLamarter of Half Moon Capital presented his in-depth investment thesis on BlueLinx (NYSE: BXC) at Best Ideas 2018.
BlueLinx is a home-building products distributor with a footprint in the Eastern and Central U.S. October’s price-indiscriminate selling of 53% of the company’s shares by legacy private equity owner Cerberus Capital (insignificant last position in its 2004 vintage fund) pushed BXC’s share price down 30+% and created a timely and unique opportunity to buy a sound business with a solid management team at a discount to intrinsic and asset value. The removal of this overhang opens up the float, improves liquidity, expands the potential shareholder base, and enables the company to use stock as a currency for acquisitions. As the selling pressure from the recent offering dissipates, and now that event-driven traders have likely moved on, the stock price appears poised to move higher. Several catalysts could create material upside, with downside protection derived from the company’s large asset base.
About the instructor:
Eric DeLamarter is the PM of Half Moon Capital— a research intensive, deep value-oriented, long/ short partnership which invests across various sectors and markets with a focus on small-mid cap companies and special situations. Prior to founding Half Moon, Eric was at Stelliam Investment Management, a value-oriented hedge fund in New York, an associate at Lineage Capital, LLC, a middle-market private equity fund and an investment banking analyst at RBC Capital Markets. Eric holds an MBA from The Heilbrunn Center for Graham & Dodd Investing at Columbia Business School, with a concentration in applied value investing and a BA from the University of Michigan.
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