OTCPK:PILBF - Post by User
Comment by
seatleslimon Nov 05, 2015 8:16am
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Post# 24260929
RE:US Concrete Q3 - aggregate pricing +12.5%
RE:US Concrete Q3 - aggregate pricing +12.5%What is interesting to me is that US Concrete has a vertically integrated strategy. In particular they have gone into markets with their ready-mix operation then tuck in aggregate properties behind them. They haven't done that in the Bay area, presumably because the can't. They share the lead market share in the Bay area with CX. I think the simple reason that this and the two large caps are volatile (other than the Texas noise) is that they've gone from making no money on depressed volumes to decent money on moderate volumes. VMC is now has an enterprise value of $15b on a $600 run rate in ebitda. Why does somebody continue to hold? because of coming operating margin improvement on predictable steady volume growth. But in the meantime it sells at a high multiple on early-cycle profitability. Probably natural for them to experience price gyrations after nice 24-month run ups. Our single-asset/single market play is a couple of years behind them; but note that volumes have gone from zero to 3.5mm tons. So far prices up only a little. This is a large strategic asset -- ignoring earnings power for the moment -- for any number of players.