The Misfits: UFP Industries (UFPI)
There are a few tell-tale signs that UFP has an incredible corporate culture that more companies should replicate. Those that have also produce market-beating results.
My family has been in the logging and lumber business since the 1940s. I can happily say I’m not in the family business.
My modest exposure told me a few things. It’s a hard business for which few people are cut out. It’s a good, not great, industry with many operational hazards. Even with a hawk-like eye on costs and a mind for efficient supply chain management, it is still a relatively low-margin business. And loggers are always belly-aching about the prices sawmills offer for lumber. (that last one is backed by academic study)
If they are all moaning about mill prices, then mills have to be a good business, right? That certainly seems to be true for UFP Industries (NASDAQ: UFPI). The mill and lumber processor has more than tripled the returns of the S&P 500 since going public in 1993.
The deeper I read into the company, the less I thought its stellar performance was a product of its industry. I would argue that the corporate culture it has employed is the most prominent indicator of its success and that culture could be applied to a myriad of industries and produce great results. There are even receipts to show it working elsewhere.
Let’s take a closer look at what makes UFP Industries tick and why we, as investors, should seek out and advocate for more companies to employ corporate policies similar to UFP.
Shoutout to Koyfin for their data and charts. Koyfin has become an integral part of how I screen for, track, and analyze companies. It has made the analysis process much faster thanks to having a decade of data at my fingertips instead of manually going through stacks of quarterly and annual filings.
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