Should You Hold Builders FirstSource (BLDR)?

Sands Capital, an investment management company, released its “Sands Capital Global Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global Growth adopts a flexible approach to identify the most promising growth companies worldwide. Global equities outperformed the MSCI ACWI in the quarter. The portfolio returned 21.7% in the quarter compared to 11.5% for the index. The second quarter results were the fourth best in both absolute and relative terms since its 2008 inception. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second-quarter 2025 investor letter, Sands Capital Global Growth Strategy highlighted stocks such as Builders FirstSource, Inc. (NYSE:BLDR). Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was 3.19%, and its shares lost 29.58% of their value over the last 52 weeks. On September 16, 2025, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $136.99 per share, with a market capitalization of $15.144 billion.

Sands Capital Global Growth Strategy stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its second quarter 2025 investor letter:

"Builders FirstSource, Inc. (NYSE:BLDR) is the largest distributor of lumber and building materials in the United States by market share. The U.S. housing market remains sluggish, with housing starts down 5 percent year-over-year in the first quarter of 2025. While the structural mismatch between supply and demand points to an eventual recovery, there are few signs of a near-term rebound. In this environment, we believe BFS is focused on the factors within its control to strengthen its competitive position. The company continues to invest in digital capabilities and value-added products, execute strategic acquisitions, and repurchase shares opportunistically. While the timing of a housing market recovery is uncertain, we remain confident that BFS is well positioned to benefit when it occurs—and that the stock offers an attractive risk-reward profile at current valuation levels."

Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 74 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the second quarter, compared to 58 in the previous quarter. Builders FirstSource, Inc.’s (NYSE:BLDR) second quarter sales decreased 5% to $4.2 billion. While we acknowledge the potential of Builders FirstSource, Inc. (NYSE:BLDR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Builders FirstSource, Inc. (NYSE:BLDR) and shared a bullish thesis on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.