I consider myself a contrarian trader/speculator/investor and as such, I am looking in the construction/building supply space as I know and understand the industry well. Obviously this is a beat up sector and so I am looking for bargains with companies that have good products, name recognition within the industry and forward looking strategies that will help them weather the rest of the storm better than others. Any names out there that are intriguing to any of you?
Okay here’s one to consider… RPM International. http://stockcharts.com/h-sc/ui?s=rpm&p=D&yr=0&mn=10&dy=0&id=p28975431170 Solid Company. Strong management and exceptional product lines. Good global exposure to continued booming markets in the far east and even with some less than stellar q’s here in the US for bit, this company is strategically positioned well going forward. Their business model (and products) are not only geared for construction but also very much geared for industrial and consumer maintenance. That is very important in the current environment. Also their focus on “green” sustainable building supplies that benefit from a growing trend in “green” construction. Also watch for a synergistic acquisition by these guys to add to their existing product lines. They have made nice acquisitions that should help their earnings over the next year. “What is RPM’s long-range strategic plan? RPM is now executing on a new three-year strategic plan, set to conclude on May 31, 2010. The goal of this plan is to reach $5 billion in sales, which RPM intends to achieve by: - Continuing to grow organically by maintaining its disciplined planning process, increasing its internal growth investments and capitalizing on its strong position in maintenance and repair, along with non-residential construction, neither of which are affected by current woes in the real estate market. - Continuing its acquisition program focused on larger platform/group sized businesses, synergistic product lines and entrepreneurial freestanding businesses. - Accelerating international expansion. - Growing its core building solutions that are already “green” and focus on sustainable building design. - Leveraging sales growth to the bottom line, driving continued income, cash flow and dividend growth.” http://ir.rpminc.com/phoenix.zhtml?c=75922&p=irol-faq#17402 I think this company is cheap right in here. Whether for a trade or an investment with a little longer time horizon…I think this one is intriguing. Best of Luck.
MHK, USG are a few…