Gypsum Management & Supply ($GMS): Another Wonderful Distribution Business

Introduction

I had always thought about distribution as a boring business and I am surprised how wrong I was! Since I started to deep dive in Pool Corporation (POOL), my interest on specialty distributors have been steadily increasing. It is fascinating how those companies are able to create virtuous cycles where all the stakeholders surrounding them benefit with the dynamics they generate. After analyzing POOL, I did the same with Watsco (WSO) and SiteOne (SITE) and my suspicions were confirmed: all of them are wonderful and powerful business models.

Now I come back with a new specialty distributor: Gypsum Management & Supply (GMS). GMS is one of the largest distributors of wallboards, ceilings and steel framings in North America. The business started in 1971 with just one location and nowadays has more than 400 branches all over US and Canada, and its recent evolution is nothing but impressive:

(Image Source: Author’s chart, Forms 10-K, 10-Q & Earnings releases)

GMS has been able to gro…