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Eagle Materials: Good Value For Long-Term Investors
Summary
- Eagle Materials sees a good growth outlook, decent capital allocation, and best-in-class ROE. These factors, combined with the recent fall in the share price, make it an appealing opportunity.
- The company is in a cyclical industry, has levels of debt to be cautious of, and operates in a capital-intensive industry.
- Yet, long-term tailwinds such as constrained domestic cement supply, infrastructure spending, and pent-up housing demand should benefit the company going forward.
Herman looks at businesses that are trading at significant discounts to their intrinsic values through bottom-up research.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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