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Construction Materials


USG
BRK.B
USG: With the help of Buffett (once again), another US company is snagged by a foreign buyer. The global mergers and acquisitions story reads a lot like global trade in that it is often a one-way street: rarely does the US intervene when a foreign entity wants to acquire a US company, but the barriers to a US company acquiring a foreign firm are often insurmountable. We have noticed that Warren Buffett often seems to be a cheerleader for the former deals, from Brazil's 3G Capital acquiring Heinz and Kraft, to the most recent one: Germany's Knauf KG gobbling up building materials firm USG (USG $26-$43-$43) for $7 billion. USG, formerly the United States Gypsum Company, has a rich history dating back to 1902, when 30 independent gypsum rock and plaster manufacturing companies merged to create a building powerhouse. Today, USG is a $6 billion company (well, $7 billion after the takeover bid) which manufactures and sells building materials around the world. "Sheetrock" is a USG brand, for example. Buffet's involvement? His Berkshire Hathaway owns 31% of the firm's outstanding shares, and that block is voting in favor of the deal. Under the terms of the agreement, current USG shareholders will receive $44 per share. That will certainly be a nice payday for Buffett's firm and its investors. We are sure he will stick around to make sure that Knauf keeps the USG headquarters in Chicago, and keeps the majority of the company's 6,800 workers employed. ​

EXP
Under the Radar: Eagle Materials
(12 Oct 2017) Eagle Materials (EXP $74-$109-$111) is a $5.3 billion mid-cap supplier of building products for use in residential, industrial, and infrastructure projects. The company operates in five different segments, from cement and aggregates to oil and gas proppants (materials designed to keep an induced hydraulic fracture open). With sales of $1.2 billion last year, the company recorded net profits of $200 million. It is noteworthy that the company has also been profitable every year for the past decade. There are around one million homes in need of repairs from the recent hurricanes; Eagle Materials will provide a good portion of the supplies needed.

OC
(20 Jun 2017) Stock of the Day.  Quiz: what do all of those new homes going up around you have in common?   There are plenty of builders to choose from when trying to take advantage of the housing boom, but there is one company that virtually all of them use for certain materials: Owens Corning (OC $46-$66-$66).  The Pink Panther company makes insulation, roofing materials, and composites (think stone veneer on the fronts of those new homes) that are used by virtually all homebuilders around the country.  With a market cap of just $7.4 billion, there is plenty of room for this mid-cap to grow, and the numbers are pointing to a strong 2017 for the firm.  If the $1 trillion infrastructure plan comes to fruition, expect OC to reap a windfall.  The company had profits of $393 million last year on revenues of $5.7 billion.
Content copyright 2021, Penn Wealth Publishing, LLC.  All rights reserved.

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Any opinions expressed are those of Penn Wealth Publishing, LLC and are current only through the date posted.  We reserve our First Amendment right to use parody, sarcasm, satire, and irreverent humor to analyze the current state of business, finance, domestic issues, and global affairs; and to speak freely, outside the zeitgeist of political correctness.  These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed.  Past performance is no guarantee of future results.  Always consult your investment professional before investing any money. All attempts to ensure accuracy in the data provided have been made, but always verify at the source before investing. This site is for informational purposes only; Penn Wealth Publishing, LLC is not responsible for any losses incurred. 

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  • Home
  • Penn...After Hours
    • News Archives
  • The Penn Portfolios
  • Contact
  • Blog
  • Financial Terms & Concepts
  • Art & Collectibles
  • Cash & Fixed Income
    • Corporate Bonds
    • Currency Trading FOREX
    • Sovereign Debt & Global Fixed Income
    • Municipal Bonds
  • Commodities
    • Coffee & Cocoa Beans
    • Cryptocurrencies
    • Grains
    • Sugar
  • Communications Services
    • Interactive Media & Services
    • Media & Entertainment
    • Telecommunication Services
  • Consumer Discretionary
    • Automotive
    • Consumer Electronics
    • Homes and Durables
    • Hotels, Resorts, & Cruise Lines
    • Leisure Equipment, Products, & Facilities
    • Restaurants
    • Multiline Retail
    • Specialty Retail >
      • E-Commerce
    • Textiles, Apparel, & Luxury Goods
  • Consumer Staples
    • Beverages & Tobacco
    • Drug Retail
    • Food & Staples Retailing
    • Food Products
    • Household & Personal Products
  • Economics
    • Economic Outlook
    • Demographics & Lifestyle
    • Education & Training
    • Goods & Services
    • Happiness Index
    • Housing
    • Supply, Demand, & Prices
    • Work & Pay
  • Energy
    • Energy Commodities
    • Energy Equipment & Services
    • Exploration & Production
    • Integrated Oil & Gas
    • Oil/Gas Refining, Storage/Transport
  • Financials
    • Capital Markets
    • Commercial Banks
    • Consumer Finance
    • Insurance
  • Global Strategy
    • Trade
    • Africa
    • Australasia
    • East & SE Asia
    • Europe
    • Global Debt
    • Global Health Threats
    • Global Organizations & Accords
    • Latin America
    • Middle East
    • Russia
    • South Asia
    • War on Terrorism
  • Health Care
    • Biotechnology
    • Health Care Facilities
    • Health Care Providers & Services
    • Life Sciences Tools & Services
    • Medical Devices Equip & Supplies
    • Pharmaceuticals
  • Industrials
    • Aerospace & Defense
    • Airlines
    • Business & Professional Services
    • Construction & Engineering
    • Industrial Conglomerates
    • Robotics & Industrial Machinery
    • Maritime
    • Road & Rail
    • Trading Companies and Distributors
    • Transportation Infrastructure
  • Information Technology
    • Application & Systems Software
    • Technology Hardware & Equipment
    • Cybersecurity
    • Electronics Equipment & Components
    • IT Software & Services
    • Semiconductors & Equipment
  • Materials
    • Chemicals
    • Construction Materials
    • Metals & Mining
  • Real Estate
    • Management & Development
    • REITs >
      • Hotel & Resort REITs
      • Retail REITs
      • Specialty REITs
  • Utilities
    • Renewables
    • Electric Utilities
  • Wall Street
    • Corporate Governance
    • Global Exchanges & Indexes
    • Market Pulse
    • Market Risk Management >
      • Market Downturns Cause & Effect
  • Washington Report
    • Fiscal Policy
    • Government Watchdog
    • Judicial Watch
    • Media Malpractice
    • Monetary Policy
    • National Security
    • Trade Policy