Construction materials

10 Best Building Materials Stocks To Buy Now

In this article, we bring you the list of the top 10 building materials stocks to buy right now. Click to jump ahead and see the Top 5 Building Materials Stocks To Buy Now.

The building materials industry consists of a wide range of companies involved in the mining, extraction, and processing of raw materials used in both heavy construction and construction. This is an important sector that greatly contributes to the economic growth of a nation. They represent the building blocks of a community, it is thanks to the construction industry that we have schools, churches, shopping centers, offices, etc. It is these buildings and infrastructure that represent the fundamental foundations of a strong economy. A strong construction sector and solid infrastructure can help attract foreign investment, boost tourism and create millions of jobs.

Even in these difficult times brought about by the impact of Covid, the construction industry remains determined to continue to meet demand and strive to keep the economy afloat.

So why invest in stocks of building materials? Construction is a $1.3 trillion industry in the United States. Worldwide, the building materials market is expected to reach over US$1 trillion in 2020. In Asia, China is the most notable country with its increased urbanization behind government infrastructure and housing investment projects.

The Federal Reserve has cut short-term interest rates to near zero and is expected to keep interest rates at the lower bound of zero for an extended period. One of the expected consequences of the Fed’s low interest rate policy is historically low mortgage rates. 30-year mortgage rates hovered below the 3% level in the second of 2020 and hit new lows almost every two weeks. This not only stimulated refinancing activity, but also increased demand for housing. Existing home sales increased 21% in September 2020 (compared to September 2019). According to NAR, the median sale price of existing homes rose nearly 15% in September. We think now may be the perfect time to get into building materials stocks.

How strong is the construction industry today? We’ve read stories about how tech upstarts are looking to disrupt the $1.3 trillion US construction market. Well, let’s just say that despite all the efforts to go contactless and digital amid the pandemic, building materials stocks are immune to disruption because there’s no technological substitute for construction materials. construction. Retailers, construction management companies, and construction workers (AI-powered robots?) might be disrupted in the future, but not materials.

In order to identify the best building materials stocks, we focused primarily on materials companies and excluded construction management companies as well as retailers such as Lowe’s (moo) and Home Depot (High Definition). Both of these stocks are among the winners of the coronavirus recession and would have topped our list of best building materials stocks. Hedge funds are particularly more bullish on LOW than HD right now. Our list started with 19 building materials stocks and we narrowed it down to 10 using the number of bullish hedge fund positions in each stock.

As a litmus test, we used hedge fund sentiment to gauge the profitability of potential investment ideas and to predict market trajectory.

In research by Insider Monkey, a select group of hedge funds have been shown to consistently outperform the S&P 500 ETFs. For example, our monthly newsletter’s portfolio of stock picks beat the market by more than 66 percentage points since March 2017 (see details here). Proving that hedge fund sentiment is definitely a beneficial metric that investors should pay attention to.

Based on our hedge fund sentiment data, we present the top 10 building materials stocks from Insider Monkey’s 800+ hedge funds:

10. Cemex SAB de CV (NYSE:CX)

Number of HF: 16

Total value of hedge funds: $283 million

Mexican multinational building materials company, CEMEX SAB de CV, (NYSE: CX) also known as Cemex, is headquartered in San Pedro, near Monterrey, Mexico. In more than 50 countries around the world, it produces and distributes cement, ready-mixed concrete and aggregates.

Cemex’s net sales in the first nine months of 2020 were $9.43 billion, down 4% year-over-year from $9.87 billion in 2019.


9. Beacon Roofing Supply, Inc. (NASDAQ:BECN)

Number of HF: 23

Total value of hedge funds: $324 million

Beacon Roofing Supply, Inc. (NASDAQ: BECN) is an American publicly traded company that markets residential and non-residential roofing and related building products in North America.

The company’s net revenue is US$6,943.9 million for the year 2020 and US$7,105.2 million for the year 2019.

8. JELD-WEN Holding, Inc. (NYSE:JELD)

Number of HF: 24

Total value of HF Holdings: $210 million

JELD-WEN Holding, Inc. (NYSE: JELD) is a holding company that, together with its subsidiaries, designs, manufactures and distributes interior and exterior doors, as well as wood, vinyl and aluminum windows.

During the third quarter of 2020, the company had net revenue of US$1,112.9 million.

7. Forterra, Inc. (NYSE:FRTA)

Number of HF: 27

Total value of HF Holdings: $129 million

Forterra, Inc. (NYSE: FRTA) manufactures precast concrete pipe and products, provides portable precast bridges and drainage inlets, wing walls, headwalls, junction boxes, end sections pipe, storm and sanitary manholes and bridges for prestressing.

During the third quarter of 2020, the company had a net sale of US$256.6 million.

6. Emcor Group, Inc. (NYSE:EME)

Number of HF: 29

Total value of HF Holdings: $178 million

Emcor Group, Inc. (NYSE: EME) is a company based in Norwalk, Connecticut, USA. They provide mechanical and electrical construction, industrial and energy infrastructure and facilities services to commercial, industrial, utility and institutional clients.

During the third quarter of 2020, the company reported operating income of $135.49 million, revenue of $2.2 billion, and cash flow of $270 million.

Click to continue reading and see the Top 5 Building Materials Stocks To Buy Now.

Chayanin Wongpracha/ Disclosure: None. 10 Best Building Materials Stocks To Buy Now is originally published on Insider Monkey.

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