Distribution Spot On - January 2023
Don Wiggins, CEO of Heritage Capital Group and distribution specialist for Oaklins, provides a market overview of the distribution sector by examining four different subgroups in the industry, exploring valuations and trends from the past three years. The Spotlight feature focuses on Beacon Roofing Supply, Inc., a publicly traded distributor of building and complementary products, and its growth strategy for the coming years.
"The good news is that many recent supply chain and distribution disruptions have begun to rationalize. However, we’re not out of that storm yet, and another storm may be on its way in the shape of higher interest rates and slowing the world economy. Some distribution sectors, such as building materials and furniture, have either flattened or turned down. Additionally, chip shortages, especially at the high end, continue to limit the availability of many products, hurting distributors. However, that shortage appears to be coming to an end. Most sectors remain relatively strong as we come out of the COVID-19 era, but the jury is still out on the prospects for 2023. With luck and appropriate government action, the hope is that interest rate increases and inflation will moderate, and the economy will recapture its previous growth trend." - Don Wiggins, Distribution Specialist, Oaklins
Click here to read the complete analysis.