Even More Cyclicals
Let’s leave no cyclical “stone” unturned. If we think the economy is going to be better than consensus, lets think about different industries in materials, industrials, and building. It is hard to draw a line, but let’s primarily stay away from the consumer cyclicals for this list.
The plan is to kick some ideas around as we wait for the end of the “earnings season”.
Steel Dynamics - STLD - $133 (a 5% bounce yesterday) is still my favorite, but let’s think about the alternatives:
AP Moller Maersk - AMKBY - $8 - 5% yield, worlds second largest shipping company, as a trade war begins value investors gather around, Danish headquartered and run, issues in the Red Sea, valuation metrics tricky to understand, just starting buybacks, worth thinking about
Martin Marietta Materials - MLM - $531 - just amazing how profitable the cement/aggregates business has become, worth thinking about, or maybe Vulcan Materials - VMC - $269
Louisiana Pacific - LPX - $115 - a case study of an “up and to the right” stock, Buffett owns 6%, and the T Rowe Price guy is a big supporter, transforming from a lumber mill to a specialty building products company
Pulte - PHM - $107 - homebuilder, a great moneymaking business, but I do not trust the mortgage subsidiary, 20% is really good 55+ business called Del Webb
Celanese - CE - $67 - chemicals, really a case study in being over-leveraged, lets look at in its own post next week
Mohawk - MHK - $117 - carpet and tile, could be cheaper but well run, Buffett owns the competitor
Whirlpool - WHR - $100 - I wish they would just cut the dividend, 7% yield
Ball - BALL - $51 - just a can maker for beer and soda, well run company, but not sure of the upside
Hillenbrand - HI - $33 - they sold the hospital bed business, and sold the casket business, and are now a strange collection of process machinery, why did they keeps this stuff?
Huntington Ingalls - HII - $169 - the second largest shipbuilder, the Navy needs more ships, but drones are an issue, controversial, in general I have avoided the war stocks, but this is a special situation
MillerKnoll - MLKN - $22 - 90% EV/Sales, what could be worse than the office furniture business, but these guys are good at it, new lows
Ethan Allen - ETD - maybe a tariff winner because of local sourcing?, older management just hanging on?
Star Bulk Carriers - SBLK - $16 - I have avoided this industry for two years, but it is calling to me, rates are back to their lows, so the stocks are cheap
Gibraltar Industries - ROCK - $60 - neat collection of businesses, but maybe too much solar exposure
Trex - TREX - $70 - high quality deck maker, big COVID cycle
Kennametal - KMT - $22 - the ultimate boring metal bender, or more accurately metal cutter
Blue Bird - BLBD - $38 - too much exposure to EV buses
Ameresco - AMRC - $21 - too much renewable energy