The construction and materials industry tends to take a hit when the economy is down – after all, very few people are building when no one is buying, especially if financing isn’t a possibility – but, for those that can afford to wait, it is also a gem. This industry goes down with the economy but it also goes back up with it. Housing indices have long been one of the measures used to gauge economic health. For the investor, this means that the returns will come eventually and, because the price slides when the economy is low, buying in during a down time is not only good investing but practically almost a sure thing. Investors are always encouraged to do their own research.
Here is a list of five construction and materials companies hedge fund managers are buying. Hedge fund managers may not know everything but they do have access to a lot more information than the average investor and most employ dozens of experts trained to examine the market, so their calls tend to be more accurate than many other money managers.
Vulcan Materials Co (VMC) was on the top of 14 fund manager lists in the third quarter amongst the 300+ hedge funds we track, including Mason Hawkins’ Southeastern Asset Management and Jean-Marie Eveillard’s First Eagle Investment. Combined, the holdings of these 14 funds weigh in at $600 million. In comparison to the second quarter, fewer funds had positions in VMC (15 to the third quarter’s 14) but total investments in the company were greater compared to the $517.23 million seen in the second quarter.
Masco Corp (MAS) was in portfolios of both Joel Greenblatt’s Gotham Asset Management and David Tepper’s Appaloosa Management at the end of the third quarter, and they were just two of the 21 hedge funds to own positions in MAS at the end of the third quarter. The volume of hedge fund interest in the company is down compared to the second quarter, when 24 funds invested a total of $361.42 million. Total hedge fund investment amongst the funds we track was down to just $108.34 million in the third quarter.
Jacobs Engineering Group Inc (JEC) also lost some hedge fund interest during the third quarter. The company, which had boasted the investment of 15 hedge funds collectively investing $247.94 million in the second quarter, fell to just 12 funds with a total $189.82 million invested. Chuck Royce’s Royce & Associates and Jim Simons’ Renaissance Technologies are both fans of JEC.
Fluor Corp (FLR) was a favorite of Joel Greenblatt’s Gotham Asset Management and Ken Fisher’s Fisher Asset Management. In the third quarter, 25 hedge funds were invested in FLR, to the collective tune of $227.36 million. This is down slightly from the second quarter, when 26 hedge funds had $289.43 million invested in FLR.
SherwinWilliams Co (SHW) was a top pick for Andreas’ Halvorsen’s Viking Global and 18 other funds in the third quarter. Together, these funds had roughly $949.14 million invested in the company. Hedge fund interest waned somewhat compared to the second quarter, when 21 funds had more than $1.25 billion invested in the company.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.