Stocks of building and construction material companies have been on fire this year. The stellar gains they have delivered can be gauged from the performance of the Dow Jones U.S. Building Materials & Fixtures Index, which has appreciated by 14.80% so far in 2016, while Dow Jones Industrial Average has inched up by 2.50%. Considering the rally that the sector is experiencing, we thought of compiling a list of building material stocks based on how popular they were among the hedge funds tracked by us at the end of first quarter. In this post, we will take a look at the five stocks that topped our list and will analyze their performance this year.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
#5 US Concrete Inc (NASDAQ:USCR)
– Investors with long positions (as of March 31): 22
– Aggregate value of investors’ holdings (as of March 31): $83.02 million
Ready-mixed concrete producer, US Concrete Inc (NASDAQ:USCR), saw its ownership among funds covered by us increasing by three during the first quarter. However, the aggregate value of their holdings in the company plummeted by over 30% during the same time. All of the four hedge funds that were the largest shareholder of the company at the end of 2015 reduced their stakes in it during the January-March period, including Chuck Royce‘s Royce & Associates, which brought its holding down by 24% to 234,104 shares. Shares of US Concrete reached their lifetime high of $69.66 in April and are currently trading up by 23% year-to-date. On April 21, analysts at BB&T Corp. initiated their coverage on the stock with a ‘Buy’ rating and $80 price target, which represents a potential upside of around 30%.