In this article, we shared the 10 stocks that are on hedge funds’ radar now. Check out the first part of the article here. Below, we discuss the final five stocks:
5. Vulcan Materials Company (NYSE:VMC)
2024 Performance: 8.6%
Number of hedge fund holdings in Q4:41
Established in 1909, Vulcan Materials Company (NYSE:VMC) produces and supplies construction aggregates and operates through Aggregates, Asphalt, Concrete, and Calcium segments. Vulcan Materials Company (NYSE:VMC) reported year-on-year revenue growth rate of 6.38% in 2023 compared to previous year and the estimate for the current year is 23.40%. In Vulcan Materials Company (NYSE:VMC) Q1 2024 Earnings Call the management shared their views on the company and the current quarterly performance. Vulcan Materials Company (NYSE:VMC) beat earnings expectations in Q1 2024. The cyclicality of industry and competition may pose potential risks for Vulcan Materials Company (NYSE:VMC), while the growth in the industry, robust pricing power, and increased demand help to mitigate those risks. Insider Monkey’s “Best Construction Materials Stocks To Invest In Right Now” article featured Vulcan Materials Company (NYSE:VMC).
Baron Real Estate Fund stated the following regarding Vulcan Materials Company (NYSE:VMC) in its first quarter 2024 investor letter:
“We added to our position in Vulcan Materials Company (NYSE:VMC) during the most recent quarter. Vulcan is a real estate-related company that is the largest construction aggregates producer in the U.S. Vulcan generates approximately 90% of its gross profit from mining, processing, and transporting crushed stone, sand, and gravel (collectively, “aggregates”) from its quarries. The balance of its gross profit is derived from strategically located ready-mix concrete and asphalt. The company’s products are sold and utilized in infrastructure projects such as highways, as well as residential and non-residential construction. Vulcan has local leadership positions across its footprint.
We believe aggregates are an attractive business for two main reasons: • High barriers to entry limit new competition: Permits to open new quarries are difficult to obtain, and the approval process typically takes 5 to 10 years • Consistent pricing power through cycles: Aggregates producers have historically enjoyed great pricing power owing to the difficulty in opening competing new quarries, the limited substitutes for quality aggregates, and a high weight-to-price ratio that makes transportation expensive relative to the cost of the material. In the last 30 years, pricing of aggregates has increased, on average, 4% per year…” (Click here to read the full text)