Bassett, who helps manage the $1.7 billion Aberdeen U.S. Small Cap Equity Fund from Philadelphia, shared three of his favorite stocks held by the fund in an interview Feb. 14:
Beacon Roofing Supply
Beacon Roofing Supply Inc. BECN, of Herndon, Va., has a market value of $2.7 billion. The company grew its sales per share by 36% during 2016, according to FactSet.
“We have always liked how they were able to consolidate a fragmented industry,” Bassett said. In October 2015, the company completed the acquisition of Roofing Supply Group, which Bassett said was its largest private competitor.
“That has given them the ability to leverage back-office costs, distribution, technology, etc., allowing them to [improve] economies of scale,” he said, adding that a reduction in debt has set up further margin improvement. This makes the company “slightly less dependent on macro factors” over the next two years, Bassett said.
Beacon’s shares closed at $45.32 on Feb. 14 and traded for 16.9 times the consensus 2018 earnings estimate of $2.69 a share, among analysts polled by FactSet.
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