Profile:

BlueLinx Holdings, Inc., through its wholly owned subsidiary, BlueLinx Corporation, distributes building products in the United States. The company’s principal product categories include structural products and specialty products. Its structural products include plywood, oriented strand board, lumber, and other wood products, primarily used for structural support, walls, and flooring in residential construction projects. The company’s specialty products include roofing, insulation, moulding, engineered wood products, vinyl products, and metal products. BlueLinx’s customers include building materials dealers, industrial users of building products, manufactured housing builders, and home improvement centers. It was formerly a subsidiary of Georgia Pacific Corp. BlueLinx Holdings is headquartered in Atlanta, Georgia.

Reason for the downfall:

BlueLinx forecast quarterly earnings of 22 cents to 26 cents per share, on revenue of roughly $1.48 billion.

Analysts' average forecast is a much higher 53 cents per share, the mean estimate of three analysts surveyed by Thomson Financial.

Shares of BlueLinx fell 74 cents, or 7.1 percent, to a new 52-week low of $9.75 in morning trading on the New York Stock Exchange. Since hitting a high of $18.25 in March, the stock has lost about half its value.

BlueLinx also projected gross profit of about $115 million was hurt by a "significant decline" in structural product prices, with the price of pine plywood, oriented-strand board and lumber down sharply from the prior-year period.


Key Stats:

Market Cap (intraday): 274.67M
Enterprise Value (7-Aug-05): 1.02B
Trailing P/E (ttm, intraday): 4.61
Forward P/E (fye 01-Jan-07) 1: 5.95
PEG Ratio (5 yr expected): N/A
Price/Sales (ttm): 0.05
Price/Book (mrq): 1.82
Enterprise Value/Revenue (ttm): 0.18
Enterprise Value/EBITDA (ttm): 7.255

Random thoughts
book looks all right. debt/equity ratio is kind of high, but most debts are long term liability; intereset expense for the quarter is over 9 mil, which isn't too much of a concern.
volume has been extremely low (38000)
Primarily, the downfall has been due to the "significant decline in structural product prices", "the Random lengths composite price index for pine plywood, oriented strand board and lumber declined 8%, 26% and 9%, respectively, during the quarter. In addition, structural rpoduct sales through the lower cost-to-serve direct channel grew disproportionately, which contributed to a lower gross margin rate."

So the analyst all missed the target because of a public-known price information. Why do they miss fire?



The majority shares (60%) are owned by Cerberus Capital Management, L.P. , who has 7 Billion under management. Here's the quote from Hoover about the nature of the hedge fund, "Named after a three-headed dog that guards the gates of hell, Cerberus Capital Management's investment strategy is to keep companies from flaming out. Holdings include a 49% stake in Japanese bank Aozora, US tech firms ICG Communications and SSA Global Technologies, and cable operator Galaxy Cable. The firm often injects capital into retail ventures -- struggling music retailer Wherehouse Entertainment was a former investment, as was beleaguered fashion house Esprit de Corp (now known as Esprit Holdings). More recently, subsidiary Riley Property acquired real estate services firm LNR Property, and Cerberus paid about $2.3 billion for MeadWestvaco's paper business, forming NewPage Corporation."

¶ 9:46 PM

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