Is Eagle Materials (EXP) A Smart Long-Term Buy?

L1 Capital, an investment management firm, published its ‘L1 Capital International Fund’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly net return of 6.2 % was recorded by the fund for the fourth quarter of 2021, underperforming its benchmark by -0.9%. The benchmark meanwhile had a 7.1% gain for the same period. The Australian dollar appreciated 0.5% against the U.S. dollar and 2.4% against the Euro, detracting from reported Fund and benchmark returns. For the 2021 calendar year, the Fund returned 41.1% (net of fees), outperforming the benchmark by 11.9%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

L1 Capital International Fund, in its Q4 2021 investor letter, mentioned Eagle Materials Inc. (NYSE: EXP) and discussed its stance on the firm. Eagle Materials Inc. is a Dallas, Texas-based building material company with a $5.6 billion market capitalization. EXP delivered a -14.79% return since the beginning of the year, while its 12-month returns are up by 15.44%. The stock closed at $141.84 per share on February 11, 2022.

Here is what L1 Capital International Fund has to say about Eagle Materials Inc. in its Q4 2021 investor letter:

“Adjustments to the portfolio were relatively modest and centred on some of the smaller positions. Within the Top 10 holdings, there were two additions and two exits, although both companies that exited the Top 10 remain meaningful positions. Eagle Materials returned to the Top 10 due to relative outperformance, with the share price increasing 27% (in USD). Eagle Materials is one of the portfolio’s businesses exposed to the U.S. new residential, repair and renovation and infrastructure sectors, all of which have a robust outlook.”

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Our calculations show that Eagle Materials Inc. (NYSE: EXP) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. EXP was in 36 hedge fund portfolios at the end of the third quarter of 2021, compared to 36 funds in the previous quarter. Eagle Materials Inc. (NYSE: EXP) delivered a -13.37% return in the past 3 months.

In November 2021, we also shared another hedge fund’s views on EXP in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.