Digging For Investment Ideas In The Construction Sector
By Alan Brochstein, CFA:
The hostile bid by Martin Marietta Materials (MLM) for larger Vulcan Materials (VMC) last week caught a lot of attention, but beaten-down construction-related stocks had already been enjoying some investor attention lately. While the performance within the group has been mixed, the average stock ($100mm or greater market cap) in the building products, construction materials and construction and engineering industries (53 stocks) has beaten the S&P 500 over the past month by over 2% and by almost 8% over the past three months. Homebuilders are up even more robustly over the past three months, outperforming the S&P 500 by a stunning 18% but still down 21% on average over 2011 relative to the market.The recent excitement seems to be a contrarian reflex, as the data doesn't seem to justify such a sharp move. We also seem unlikely to be about to embark on a fiscal spending program that mightComplete Story »
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