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Here's How Much You'd Have If You Invested $1000 in Louisiana-Pacific a Decade Ago

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Louisiana-Pacific (LPX - Free Report) ten years ago? It may not have been easy to hold on to LPX for all that time, but if you did, how much would your investment be worth today?

Louisiana-Pacific's Business In-Depth

With that in mind, let's take a look at Louisiana-Pacific's main business drivers.

Louisiana-Pacific Corporation is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction. Currently, the company operates 20 moderns, strategically located facilities in the United States and Canada, two facilities in Chile and one facility in Brazil. It also operates facilities through a joint venture. The company’s products are used primarily in new home construction, repair as well as remodeling and outdoor structures.

The company has four reportable segments — Siding (contributing 34.4% of 2020 net sales), Oriented Strand Board or OSB (43.8%), Engineered Wood Products or EWP (14%) and South America (6.1%). Notably, revenues from Other sources and Inter-segment sales accounted for 1.8% of its total net sales.

Siding segment consists of LP SmartSide trim and siding, as well as LP Outdoor Building Solutions innovative products for premium outdoor buildings.

OSB segment manufactures and distributes OSB structural panel products including LP OSB, LP TechShield radiant barrier, LP TopNotch sub-flooring, LP Legacy super tough, moisture-resistant sub-flooring, LP WeatherLogic air & water barrier and LP FlameBlock fire-rated sheathing.

EWP segment comprises LP SolidStart I-Joist (IJ), Laminated Veneer Lumber (LVL) and Laminated Strand Lumber (LSL) and other related products.

South America segment manufactures and distributes OSB and siding products in South America and certain export markets.South America segment manufactures and distributes OSB and siding products in South America and certain export markets.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Louisiana-Pacific ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in April 2011 would be worth $7,465.37, or a gain of 646.54%, as of April 29, 2021, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 207.48% and the price of gold went up 9.54% over the same time frame.

Analysts are anticipating more upside for LPX.

Louisiana-Pacific's shares have outperformed the industry in the year-to-date period. During 2020, the company achieved 20.7% and 273.7% growth in net revenues and adjusted EBITDA, respectively, on a year-over-year basis. It is benefitting from its continuous focus on improving business by growing the Siding unit and simultaneously reducing cost across all businesses. Solid repair and remodeling activities along with ample liquidity have been facilitating the company to tide over the pandemic. Moreover, strong SmartSide strand performance, increase in OSB pricing, favorable resin costs, operational efficiency, cost-containment efforts and resilient housing market prospects will likely enable it to drive growth. Notably, the company's bottom-line estimates for 2021 have increased over the past 30 days.

Shares have gained 24.38% over the past four weeks and there have been 3 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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