small hat | | 11:08 AM
The New Criterion by Editor Tim Boreham
Various performances in the ASX building materials sector show that a rising or falling tide does not necessarily move all ships.
For providers of mundane but essential materials such as brick, concrete, panels, faucets, and toilets, the terms look at face value.
The housing sector looks weaker than it has in years, thanks to the Reserve Bank’s ongoing tough financial drugs, while suppliers struggle with rising labor and input costs (especially gas).
As always, it’s worth taking a closer look at which sectors a particular company is exposed to, rather than following the (admittedly bleak) macro theme of an impending recession and a full-blown housing meltdown.
Outside of housing, broader construction conditions look much more positive, thanks to government-funded “large-scale construction” projects.
The listed sector is dominated by $13 billion Irish companies. james hardy industries ((JHX)), $3.5 billion brickworks ((BKW)), a cement manufacturer Adbri ((ABC)), CSR ((CSR)) and Kelly-Stokes control Boral ((BLD)).
Performance varies, but broadly speaking the sector is making calls and going “down”. US-centric James Hardy lost his third of its value last year, with Adbri and Boral down 37% and 40% respectively. But CSR shares, which also have interests in real estate and aluminum, are only 5% off the pace.
Then there are the much smaller, lesser-known clusters of stocks that are lesser-known but consistently perform well by focusing on specific sectors.
based in sydney Acrow Formwork and Construction Services ((ACF)) was previously owned by Boral and Private Equity before delisting in April 2018.
The full story is for FNArena subscribers only.Read the full story and enjoy an additional 2-week free trial SIGN UP HERE
If you already have a free trial, why not join us as a paid subscriber? click here