Owens Corning (OC-N)

The materials and industrial space have come under pressure and the company has had two negative earnings in a row. As a rule, he never invests in companies that have done this. He would wait until the results reverse.

What is your 2-3 year outlook for this stock? The dramatic decline in price this year is a signal of increasing competition in this space. This is like trying to catch a falling knife. He would leave this alone.

(Past Top Pick on August 8, 2017, Down 3%) Sold his holdings last Decemver as interest rates rose which pressured housing stocks. So far in 2018, home builders and their suppliers are having a tough time. Things will improve though. OC is a great company, though, in insulation and roofing products.

This is a very big position for him. Trading better than 93% of the stocks in the S&P so far this year. Earnings keep getting better. This is 2 businesses. They make roofing materials and pink insulation. Insulation markets in the US are sold out, so margins are going higher as prices firm. Flooding and hurricanes has added some demand. US homebuilding is growing north of 10% in many US states. This is an early stage in the structural theme in the US. Millennials are starting to buy homes.

Mainly focused on fiberglass. Thinks the vast majority of upside on the stock is behind us. This is very levered to housing markets, and go up and down big time. It’s done well because housing has recovered in the US, and will probably continue to do well. However, you have to get out of it when you think the housing market is done.

US housing market and homebuilders is a sector he is very focused on. There is a tremendous amount of pent-up demand. About 40% of revenue comes from roofing and about 20% comes from insulation. The lions share of their revenue comes out of the US. Dividend yield of 1.2%. (Analysts’ price target is $69.)