Buy QXO for Building a Consolidation Play in Building Products

2 months ago

Steve Clapham

"We sold some Tesla to buy QXO. We paid about $11 a share when QXO became tradable after Silver Sun Technologies was converted into a public company. With the stock now roughly double at $22 a share, and with a forecast to boost EBITDA from about $1 billion today to nearly $2 billion in three and a half years, the catalyst lies in harvesting operational synergies via the Beacon acquisition and redeploying free cash flow at an internal rate of return between 17% and 23%, with parts of the business targeting even higher returns in the 30% to 35% range."

The speaker outlines an actionable trade call for public market investors to reallocate part of their portfolio by buying QXO. The trade is based on QXO’s consolidation strategy in the building products distribution industry, quantitative trade details including an entry price of $11 with the stock having doubled to $22, and future EBITDA growth prospects, making it a compelling consolidation play with targeted high internal rates of return.

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