On Jan 9, we upped our recommendation on
Vulcan Materials Company
) from Neutral to Outperform based on strong third-quarter 2013
Vulcan announced impressive third-quarter results on Nov 4.
Third-quarter adjusted earnings of 32 cents per share surpassed
the Zacks Consensus Estimate by 28%. Earnings per share improved
significantly from the prior-year quarter on the back of solid
revenue increase in most of the segments.
Total revenue also beat the Zacks Consensus Estimate and
increased 11.6% from the prior-year quarter owing to pricing
gains and volume growth. The growth was driven by improved
product demand owing to broad based recovery in private
construction activity, especially residential. Improved demand
also favored pricing across most of its markets. Gross profit and
adjusted EBITDA also grew strongly driven by strong top line and
solid cost control.
Additionally, most of the volume and pricing increase was
noted in the aggregates segment which was sluggish in the past
few quarters. Management is seeing improving trends in
aggregates' requirement as private construction demand is growing
with the recovery in the overall housing industry. The demand for
highway construction is also expected to grow gradually with
increased funding certainty from the new highway bill and an
expanded Transportation Infrastructure Finance and Innovation Act
Many favorable-ranked stocks in the building materials/home
improvement sector include
James Hardie Industries plc
United Rentals, Inc.
). While James Hardie sports a Zacks Rank #1 (Strong Buy), Masco
and United Rentals carry a Zacks Rank #2 (Buy).
JAMES HARDI-ADR (JHX): Free Stock Analysis
MASCO (MAS): Free Stock Analysis Report
UTD RENTALS INC (URI): Free Stock Analysis
VULCAN MATLS CO (VMC): Free Stock Analysis
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