And recent consolidation amongst the supplier base suggests the industry is likely to be more disciplined on pricing going forward. But in recent years, demand has closed the gap with supply. This is primarily because the industry has been operating well below capacity ever since the Global Financial Crisis. One factor at play in the underperformance has likely been wallboard pricing, which has generally been inconsistent over the years.
That presentation was recently posted to our website and can be found here. For those interested, I recently discussed the primary causes of this dynamic and elements that may be changing in a presentation for an investor event with BTIG this past month. Despite this performance, its shares have underperformed its most relevant building product distributor peers substantially, resulting in valuation compression on both an absolute basis and versus peers. Since its debut in 2016, GMS has grown earnings at a 25% CAGR. With those attributes, it’s not surprising to see that the company has generally been quite successful since coming public. The net result is a well-managed market leader with strong returns on capital and ample reinvestment opportunities. GMS enjoys an advantaged industry structure where the top three distributors serve about half the market, positioning them as leaders with a firm grip on the market, but with runway for growth through accretive bolt-on acquisitions. The company has a strong entrepreneurial culture and a proven yet young new management team that has been in place since 2019. As the largest distributor of wallboard in the US, there is a lot to like. “ GMS – Investors who have been with us a number of years will likely recognize our recently reinitiated position in GMS, a company we had previously owned and held in high regard. Here is what Choice Equities Capital Management, has to say about GMS Inc. The stock closed at $59.87 per share on December 13, 2021. GMS delivered an 89.30% return since the beginning of the year, while its 12-month returns are up by 103.89%. is a Tucker, Georgia-based building products distributor with a $2.4 billion market capitalization. ( NYSE: GMS ) and discussed its stance on the firm. Choice Equities Capital Management, in its Q3 2021 investor letter, mentioned GMS Inc.
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