Infrastructure bet
Vulcan Materials Company (NYSE:VMC) is the largest producer of construction aggregates in the U.S. Aggregates include crushed stone, sand and gravel. Aggregates shipments are expected to grow by 1% to 5% in 2013, an increase from the 1% decline in 2012. One of the big tailwinds for Vulcan is the growing demand for highway construction, thanks to increased funding with a new highway bill. The 2012 multi-year highway bill is expected to provide the state transport departments with highway funding and increase demand for highway construction. Another positive for the company includes an improvement in residential housing.
In 2012, publicly funded construction accounted for approximately 54% of total aggregate shipments. Overall, this is a positive, where public spending tends to be more stable than the private sector. I think the focus on infrastructure spending will get more attention going forward, especially following the recent Washington bridge collapse.
Bottom line
York Capital made some key bets on a housing recovery by adding CBRE and Vulcan to its portfolio last quarter. I think both stocks appear to be solid buys for the long term. Meanwhile, one of York Capital’s biggest sell-offs was General Growth Properties Inc (NYSE:GGP), which offers investors an under-impressive dividend compared to other REITs.
In addition, Citi has seen a run up in its stock following the financial crisis and could now be a bit overvalued. York’s sell-off of Yahoo! comes as the tech company just spent $1.1 billion for Tumblr and is now in the running to purchase the streaming content company Hulu. Although these acquisitions could be long-term positives, I would hold off on investing in Yahoo! until we get more color on its strategy for implementation and growth.
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Marshall Hargrave has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!
The article York Capital’s Latest Moves originally appeared on Fool.com and is written by Marshall Hargrave.
Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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