More on housing from Boise Csacade

I don’t like playing earnings but BCC, this recent IPO has pulled back and may present a bounce opportunity for Monday.  I am doubtful of anything more than a bounce because private equity Dearborn Madison firm owns a control position with no real lock ups. From their recent prospectus

“From 2005 to 2011, total housing starts in the United States declined by more than 70%. According to the U.S. Census Bureau, total housing starts in the United States were 0.59 million in 2010, 0.61 million in 2011 and 0.78 million in 2012. While 2012 housing starts increased from 2011 levels, they remained significantly less than the 50-year average rate of 1.5 million. Prior to 2008, the housing market had not experienced a year with total housing starts below 1.0 million since the U.S. Census Bureau began its annual recordkeeping in 1959.

              As of July 2013, the Blue Chip Economic Indicators median consensus forecast of single- and multi-family housing starts in the U.S. was approximately 1.00 million units for 2013 and approximately 1.20 million units for 2014, which represent annual increases of 28% and 20%, respectively. We believe that over the long-term, there is considerable growth potential in the U.S. housing sector. As of July 2013, IHS Global Insight estimates that total U.S. single- and multi-family housing starts will average 1.49 million units per year from 2013 through 2022, levels that are approaching the 50-year historical average.

              Our products are not only used in new residential construction, but also in residential repair and remodeling projects. Residential repair and remodeling spending increased significantly over the past 15 years. According to the Home Improvement Research Institute (“HIRI”), total U.S. home improvement product sales increased 81.5% from $165 billion in 1996 to a peak of $300 billion in 2006. U.S. Repair and remodeling spending declined between 2006 and 2010 but posted modest growth thereafter, with total spending in 2012 equaling $276 billion. The overall age of the U.S. housing stock, increased focus on making homes more energy efficient, rising home prices and availability of consumer capital at low interest rates are expected to drive long-term growth in repair and remodeling expenditures. HIRI estimates that total U.S. sales of home maintenance, repair and improvement products will grow at a compounded annual rate of 4.6% from 2012 through 2017.”