Company Overview - Simpson Manufacturing Co., Inc. (NYSE:SSD) designs and produces structural connectors, fasteners, anchors, and related products for residential, commercial, and infrastructure construction markets [4] Financial Performance - In Q4, Simpson Manufacturing reported revenue of $539.3 million, surpassing the consensus estimate of $530.7 million [3] - The company achieved a 19.6% operating margin, reflecting disciplined cost control and pricing execution [3] - For 2025, Simpson Manufacturing delivered 4.5% revenue growth despite a challenging housing backdrop [3] Strategic Focus - Management emphasized ongoing investment in innovation, digital capabilities, manufacturing expansion, and distribution infrastructure [3] - The company aims to grow above market rates and achieve at least a 20% operating margin [3] Market Position - As of Q3 2025, 34 hedge funds had stakes in Simpson Manufacturing, indicating strong interest from institutional investors [4] - The company is considered one of the best lumber stocks to invest in currently [4] Analyst Insights - Stephens raised its price target on Simpson Manufacturing to $200 from $187 while maintaining an Equal Weight rating after the fourth-quarter results exceeded expectations [2] - The analyst remains cautious due to choppy construction demand and valuation near the upper end of its historical range [2]

Core Insights - Simpson Manufacturing reported full-year 2025 net sales of $2.3 billion, reflecting a 4.5% increase from 2024, driven by pricing actions, acquisitions, and foreign exchange benefits, despite a 1% decline in volume due to weaker housing starts [3][4][7] Financial Performance - In Europe, full-year net sales reached $499.6 million, up 4.3% year over year, with volumes outperforming the market [1] - North America saw full-year net sales of $1.8 billion, up 4.5%, benefiting from approximately $60 million in pricing actions, although volumes declined due to lower housing starts [2] - The company generated $458.6 million in operating cash flow for 2025 and ended the year with a net cash position of $9.9 million [5][18] - Fourth-quarter consolidated net sales were $539.3 million, up 4.2%, with North America sales rising 3% and Europe sales increasing 9.1% [13] Margins and Costs - The consolidated gross margin for 2025 was relatively flat at 45.9%, while the operating margin improved to 19.6%, up 30 basis points year over year [12] - The company faced approximately $100 million in tariff-related costs impacting gross margins, but strategic cost-saving initiatives are expected to deliver at least $30 million in savings [6][17] Segment Performance - The OEM business experienced strong growth with double-digit volume increases, while component manufacturing saw low single-digit growth [10] - Commercial volumes were flat, and residential volumes declined modestly, particularly in the western and southern U.S. [10][11] Future Outlook - For 2026, the company targets an operating margin range of 19.5% to 20.5%, with expectations of slightly lower gross margins due to tariffs and increased depreciation costs [21] - The company anticipates U.S. housing starts to remain relatively flat year over year, while Europe is expected to see slight market growth [22] Shareholder Returns - Simpson repurchased $120 million of stock in 2025 and authorized a new $150 million buyback, committing to return at least 35% of free cash flow to shareholders [5][20]

| Three Months Ended, | Quarter-Over | Twelve Months | | Year | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Ended, | | Over | | | | | | | December 31, | Quarter | December | | Year | | | | | | | | | 31, | | | | | | | | | 2025 | 2024 | Change | | 2025 | | 2024 | Change | | | | (In thousands, except per | (In thousands, except per | | | | | | | | | | share data and percentages) | share data and percentages) | | | | | | | | | | Net sales | $ 539,345 | $ | 517,429 | 4.2 | % | $ ...

Core Viewpoint - Simpson Manufacturing Co., Inc. will report its financial results for the fourth quarter and full year ended December 31, 2025, on February 9, 2026, at 4:15 p.m. Eastern Time [1] Group 1: Financial Reporting Details - The conference call will be hosted by Michael Olosky, President and CEO, and Matt Dunn, CFO and Treasurer, on the same day at 5:00 p.m. Eastern Time [1] - The call will be available via live broadcast on the Company's Investor Relations website [1] - A replay of the call will be accessible starting at 8:00 p.m. Eastern Time on February 9, 2026, until 11:59 p.m. Eastern Time on February 23, 2026 [2] Group 2: Company Overview - Simpson Manufacturing Co., Inc. is headquartered in Pleasanton, California, and is a leading manufacturer of wood and concrete construction products [3] - The Company supplies building product solutions primarily to residential and commercial markets in North America and Europe [3] - The common stock of the Company trades on the New York Stock Exchange under the symbol "SSD" [3]

Market Overview - The market in 2025 was characterized by extreme volatility, with small caps experiencing a significant rally followed by a sharp retreat due to various uncertainties, including government policy and AI-related concerns [4][5] - Small caps outperformed large caps in earnings growth for the first time in over a decade during the third quarter, indicating an improving earnings backdrop for this asset class [5][6] - Despite challenges, the U.S. economy showed solid growth, allowing the Federal Reserve to continue its rate-cutting cycle [4] Performance Overview - The ClearBridge Small Cap Growth Strategy underperformed the Russell 2000 Growth Index in the fourth quarter, primarily due to disappointing earnings in the IT sector and a strong rally in biotechnology stocks [6][7] - The biotechnology sector saw a significant rebound, with the Russell 2000 Growth Biotech Index returning 28.1%, highlighting the challenges faced by other sectors [6] - The health care sector contributed positively to performance, with notable individual performers like Penumbra and Insmed [8][19] Portfolio Positioning - In 2025, the company established 29 new investments and exited 19 positions, indicating an active year for idea generation [10][11] - New investments included Protagonist Therapeutics, Simpson Manufacturing Company, BETA Technologies, and Dyne Therapeutics, each with strong growth potential in their respective fields [11][22] - The company maintained a disciplined approach to selling positions where fundamentals changed or catalysts were lacking [10] Outlook - The outlook for small cap growth stocks in 2026 is optimistic, with expectations for a broadening of growth leadership across various industries [13][14] - The productivity benefits of AI are anticipated to become more visible, potentially benefiting companies leveraging AI for efficiency and new product offerings [14] - Capital markets are showing signs of improvement, with increased IPO activity and M&A volumes, creating a favorable environment for small cap investments [15][16]

Upgrades - JPMorgan upgraded MP Materials (MP) to Overweight from Neutral with a price target of $74, down from $75, citing the company's national security importance as underappreciated at current share levels [2] - Jefferies upgraded Gap (GAP) to Buy from Hold with a price target of $30, up from $22, noting a strong turnaround under new management for both Gap and Old Navy brands [2] - Mizuho upgraded TripAdvisor (TRIP) to Neutral from Underperform with a price target of $17, up from $14, believing that the company's traffic weakness is now better reflected in the shares [3] - Loop Capital upgraded Shake Shack (SHAK) to Buy from Hold with a price target of $127, up from $98, arguing that concerns over slower growth in October are overblown [3] - Baird upgraded Circle Internet (CRCL) to Outperform from Neutral with an unchanged price target of $110, viewing Circle's current valuation as reasonable given the outstanding growth of USDC [3] Downgrades - Jefferies downgraded Progressive (PGR) to Hold from Buy with a price target of $232, down from $261, anticipating a lighter growth environment due to increased competition in the personal auto insurance market [4] - BofA downgraded Flowserve (FLS) to Neutral from Buy with a price target of $73, up from $60, believing that near-term nuclear upside is already priced into shares [4] - BofA downgraded StubHub (STUB) to Neutral from Buy with a price target of $19, down from $25, as Q3 revenue and EBITDA beat expectations but lacked guidance for Q4 metrics [5] - Craig-Hallum downgraded Applied Materials (AMAT) to Hold from Buy with a price target of $190, suggesting that better buying opportunities may arise in the coming quarters as industry spending increases are still some time away [5] - Stifel downgraded Home Depot (HD) to Hold from Buy with a price target of $370, down from $440, expressing a cautious bias ahead of the company's Q3 report [6] Initiations - Baird initiated coverage of Microsoft (MSFT) with an Outperform rating and a $600 price target, highlighting its leadership in the AI revolution through partnerships with OpenAI [7] - Loop Capital initiated coverage of Polaris (PII) with a Hold rating and a $59 price target, maintaining a cautious view on the company's long-term outlook [7] - Wells Fargo initiated coverage of United Rentals (URI) with an Overweight rating and a $995 price target, favoring construction machinery stocks over engineering services due to a favorable supply setup [7] - Cantor Fitzgerald initiated coverage of DiaMedica Therapeutics (DMAC) with an Overweight rating and a $25 price target, noting compelling data for DM199 in treating pre-eclampsia [8] - Stephens initiated coverage of Simpson Manufacturing (SSD) with an Equal Weight rating and a $187 price target, expecting subdued U.S. housing starts until at least the second half of 2026 [8]

Core Insights - Simpson Manufacturing Company announced a strategic plan aimed at achieving annual cost savings of $30 million [1] - The company reported a 6.2% increase in net sales for the third quarter, primarily driven by price increases and favorable currency fluctuations [1] Group 1 - The stock price of Simpson Manufacturing rose by 4.2% in early trading on Tuesday [1] - The strategic plan focuses on cost reduction to enhance profitability [1] - The positive impact on sales is attributed to effective pricing strategies and beneficial exchange rate movements [1]

Core Thesis - Simpson Manufacturing Co., Inc. (SSD) demonstrated strong quarterly performance, exceeding revenue and EPS estimates, which supports a bullish investment thesis [2][4] Financial Performance - SSD reported revenue of $631 million, surpassing the $599 million estimate, and adjusted EPS of $2.47 compared to the consensus of $2.31 [2] - The trailing P/E ratio for SSD was noted at 22.94 as of September 22nd, with shares trading at $180.27 [1] Growth and Guidance - Organic growth in North America was modest at 4.5% year-over-year, while Europe experienced a decline of 2.7% excluding currency effects [2] - Management reaffirmed guidance for 2025, indicating continued confidence in profitability [2] Operational Highlights - The Columbus facility was completed on time and under budget, enhancing domestic production capabilities and supporting margin expansion [3] - Analysts expect mid-single-digit price increases to contribute to revenue growth, with potential for further price adjustments in response to tariffs [3] Market Reaction and Positioning - Following the strong quarterly results, SSD's stock gained nearly 10%, reflecting a catch-up to fair value rather than a structural rerating [4] - SSD is positioned well with solid cash flow generation, margin resilience, and capacity expansion, indicating a low-risk investment case with potential upside [4] Comparison with Industry Peers - A comparison was made with Owens Corning (OC), which has faced a 23.57% depreciation since previous coverage, yet maintains strong fundamentals [5] - Andrew Beeli emphasizes SSD's operational execution and disciplined cost management as key differentiators in the current market [5]

Core Insights - LRT Capital Management's "LRT Global Opportunities Strategy" reported a net return of -8.00% for September 2025 and a year-to-date return of -0.17%, indicating a challenging month amid market volatility [1] Company Overview - Simpson Manufacturing Co., Inc. (NYSE:SSD) is a leader in the North American market for engineered structural connectors, providing essential products critical to the structural integrity and safety of buildings [3] - The company has a market capitalization of $7.061 billion, with its stock closing at $169.67 per share on October 6, 2025 [2] Performance Metrics - Simpson Manufacturing Co., Inc. experienced a one-month return of -10.84% and a 52-week loss of 12.38% [2]

Investment Strategy Overview - LRT Global Opportunities strategy returned -8.00% in September and -0.17% year-to-date as of October 1, 2025 [4][5] - The strategy focuses on long positions in high-quality companies and short positions in broad market indexes, viewing September's performance as a temporary setback [6] - Current market valuations are at extreme levels, with a trailing P/E ratio over 30x, P/B ratio over 5.6x, and cyclical P/E over 40x, indicating potential future return challenges [7] Company Highlights StoneX Group Inc. (SNEX) - StoneX operates as a diversified financial services network, providing execution, clearing, payment, and advisory services across various asset classes [12][13] - The company focuses on underserved client segments, leveraging deep institutional knowledge and a robust global infrastructure [13][14] - StoneX's growth strategy combines organic expansion with strategic acquisitions, enhancing capabilities and geographic reach [14][15] Simpson Manufacturing Co., Inc. (SSD) - Simpson is a leader in engineered structural connectors, with products specified in building codes, creating high switching costs for customers [16][17] - The company benefits from a strong distribution network and technical support, reinforcing its market position [18][19] - Demand for Simpson's products is driven by housing construction and stricter building codes due to extreme weather events [19][20] Asbury Automotive Group, Inc. (ABG) - Asbury operates a diverse portfolio of dealerships, focusing on high-margin parts and service operations for revenue stability [21][22] - The company has a proven track record in strategic acquisitions, enhancing its operational footprint and earnings power [23][24] - Asbury's digital retailing platform, Clicklane, integrates online and in-store experiences, providing a competitive advantage [24][25] Chemed Corp. (CHE) - Chemed operates VITAS Healthcare and Roto-Rooter, benefiting from strong demand in hospice care and plumbing services [26][27] - VITAS is positioned to capitalize on the aging U.S. population, while Roto-Rooter offers recession-resistant services [28][29] - The company has a disciplined capital allocation strategy, returning significant capital to shareholders [29] The Toronto-Dominion Bank (TD) - TD is a major player in North America's banking sector, with a focus on retail and commercial banking [30][31] - The bank's U.S. retail segment has been a primary growth engine, supported by strategic acquisitions [32] - TD's conservative risk culture and strong capital management contribute to its competitive advantage [34] RLI Corp. (RLI) - RLI is a specialty insurance company known for its underwriting discipline and focus on niche markets [35][36] - The company prioritizes profitability over growth, maintaining a strong alignment of interests through employee ownership [37][38] - RLI has a history of returning excess capital to shareholders, demonstrating a commitment to shareholder value [38] The Toro Company (TTC) - Toro is a leader in turf and landscape solutions, known for its quality and innovation [39][40] - The company has a strong distribution network and a disciplined growth strategy, including strategic acquisitions [41][42] - Toro consistently generates strong free cash flow, which is reinvested in product development and shareholder returns [42] Crown Castle International Corp. (CCI) - Crown Castle owns the largest portfolio of shared communications infrastructure in the U.S., primarily macro cell towers [43][44] - The company benefits from long-term lease agreements, providing predictable revenue streams [44][45] - Crown Castle is divesting non-core businesses to focus on its tower portfolio, enhancing shareholder value [46] Corporación América Airports S.A. (CAAP) - CAAP operates 53 airports across six countries, generating revenue from aeronautical and commercial activities [48][49] - The company invests in airport infrastructure to enhance operational efficiency and passenger experience [51] - CAAP is well-positioned to benefit from the recovery in global air travel [52] Colliers International Group Inc. (CIGI) - Colliers is a global leader in commercial real estate services, distinguished by its decentralized structure and entrepreneurial culture [53][54] - The company pursues a balanced growth strategy, focusing on high-margin business lines [56] - Colliers' ownership culture aligns interests with long-term shareholders, enhancing its competitive advantage [54] The Travelers Companies, Inc. (TRV) - Travelers is a leading provider of property and casualty insurance, organized into three primary segments [57][58] - The company benefits from a vast distribution network and strong relationships with independent agents [58][62] - Travelers leverages its scale and data advantages to maintain profitability and manage risks effectively [62] Petróleo Brasileiro S.A. - Petrobras (PBR-A) - Petrobras is a major integrated energy producer, controlling significant pre-salt oil reserves [63][64] - The company focuses on maximizing value from its most profitable exploration and production activities [65][66] - Petrobras' performance is closely tied to its operational execution in the pre-salt basins [66] Fabrinet (FN) - Fabrinet specializes in advanced optical packaging and precision manufacturing, serving leading OEMs [67][68] - The company's engineering expertise and focus on complex manufacturing create high switching costs [68][69] - Fabrinet benefits from secular tailwinds in the optical communications market, driven by data traffic growth [69][70] UnitedHealth Group Incorporated (UNH) - UnitedHealth is a leading healthcare enterprise, combining health benefits with diversified health services [71][72] - The company's scale provides cost advantages and superior negotiating power in the healthcare market [73][74] - UnitedHealth's integrated model enhances efficiency and patient outcomes, positioning it for continued growth [74] Charter Communications, Inc. (CHTR) - Charter is a major connectivity provider in the U.S., focusing on high-speed broadband services [76][77] - The company is upgrading its network to meet increasing bandwidth demands and expanding into underserved areas [79] - Charter's convergence of services, including mobile offerings, enhances customer loyalty and reduces churn [78][79] Group 1 Automotive, Inc. (GPI) - Group 1 operates a diversified automotive retail business, focusing on luxury and import brands [80][81] - The company's disciplined acquisition strategy enhances performance and profitability [82] - Group 1's digital retailing platform improves customer experience and operational efficiency [82][83] Exxon Mobil Corp (XOM) - Exxon Mobil is a leading integrated energy and chemical manufacturer with a vertically integrated business model [85]