The Misfits: James Hardie Industries (JHX)

Simple products in unique market positions can be great investments

The Builders, Jacob Lawrence, 1947, Tempera (The White House Historical Association)

I worked a few summers during high school and college for a siding & roofing subcontracting company. For much of one summer, we worked on a set of townhomes at a golf course. The siding & trim board we used was like nothing I had ever worked with. It was a cement fiberboard product called Hardie Plank and Hardie Trim.

I could try to explain it, but hearing it from the folks over at This Old House is more interesting.

I can’t say that my experience with the product nearly 20 years ago would have had me running to own shares of James Hardie Industries. Although, you can probably chalk that bad experience up to cheap bosses and not the product. Perhaps I should have taken a greater interest in James Hardie then. Had I done so, it would have been a better investment than Home Depot or Lowe’s.

Even though this company has been a fantastic wealth creator for its investors, no Wall Street analysts are covering it, and there is scant coverage in financial media. I don’t know the Australian equivalent to Wall Street, but some analysts down under that cover it.

So let’s dig into this unique building supply company that smashes the market and seems to get little attention for the feat.

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