BlueLinx (NYSE:BXC) Trading Down 6.1% - Time to Sell?

Key Points

• BlueLinx Holdings Inc. shares dropped by 6.1% to $80.38 during trading, significantly below the previous close of $85.64.
• Brokerages have downgraded BlueLinx; Wall Street Zen issued a "sell" rating, while Benchmark reduced its price target from $110.00 to $83.00.
• The company has approved a stock repurchase plan worth $50 million, indicating management's belief that the stock is undervalued.

BlueLinx Holdings Inc. (NYSE:BXC - Get Free Report)'s stock price fell 6.1% during mid-day trading on Tuesday . The company traded as low as $81.08 and last traded at $80.38. 39,734 shares were traded during mid-day trading, a decline of 60% from the average session volume of 98,265 shares. The stock had previously closed at $85.64.

Analysts Set New Price Targets

A number of brokerages have issued reports on BXC. Wall Street Zen downgraded BlueLinx from a "hold" rating to a "sell" rating in a research note on Friday, July 18th. Benchmark reduced their price objective on BlueLinx from $110.00 to $83.00 and set a "buy" rating for the company in a research note on Friday, August 1st. Finally, DA Davidson set a $75.00 price objective on BlueLinx and gave the company a "neutral" rating in a research note on Monday, August 4th. Two equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $91.00.

BlueLinx Trading Down 6.2%

The firm has a fifty day simple moving average of $79.83 and a two-hundred day simple moving average of $75.15. The stock has a market cap of $633.65 million, a PE ratio of 23.81 and a beta of 1.58. The company has a current ratio of 4.55, a quick ratio of 2.94 and a debt-to-equity ratio of 0.96.

BlueLinx declared that its Board of Directors has approved a stock repurchase plan on Tuesday, July 29th that permits the company to buyback $50.00 million in outstanding shares. This buyback authorization permits the construction company to repurchase up to 8% of its stock through open market purchases. Stock buyback plans are generally a sign that the company's management believes its shares are undervalued.

Hedge Funds Weigh In On BlueLinx

Several institutional investors have recently modified their holdings of BXC. Public Employees Retirement System of Ohio increased its position in shares of BlueLinx by 33.7% during the 4th quarter. Public Employees Retirement System of Ohio now owns 504 shares of the construction company's stock valued at $51,000 after purchasing an additional 127 shares during the last quarter. CWM LLC increased its position in shares of BlueLinx by 92.8% during the 1st quarter. CWM LLC now owns 696 shares of the construction company's stock valued at $52,000 after purchasing an additional 335 shares during the last quarter. Tower Research Capital LLC TRC increased its position in shares of BlueLinx by 114.1% during the 2nd quarter. Tower Research Capital LLC TRC now owns 792 shares of the construction company's stock valued at $59,000 after purchasing an additional 422 shares during the last quarter. PNC Financial Services Group Inc. increased its position in shares of BlueLinx by 169.7% during the 1st quarter. PNC Financial Services Group Inc. now owns 1,618 shares of the construction company's stock valued at $121,000 after purchasing an additional 1,018 shares during the last quarter. Finally, Quantbot Technologies LP bought a new position in shares of BlueLinx during the 1st quarter valued at about $153,000. 90.83% of the stock is currently owned by institutional investors.

About BlueLinx

BlueLinx Holdings Inc, together with its subsidiaries, engages in the distribution of residential and commercial building products in the United States. It distributes specialty products, including engineered wood, siding, millwork, outdoor living, specialty lumber and panels, and industrial products; and structural products, such as lumber, plywood, oriented strand boards, rebars and remesh, as well as other wood products that are used for structural support in construction projects.

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