Once technology gets going, construction of some sort usually joins in on a recovery.
So we're now at a stage where companies like US Concrete (NASDAQ:USCR) start to get interesting.
The company reported its first quarter last week and the numbers were not bad. Sales were $123 million, against $87 million a year earlier. The company lost $4.3 million, but that was down from $15.7 million, and included $1.1 million in costs for moving its headquarters from Houston to the Dallas suburb of Euless later this year. Take out interest, income taxes, depreciation and amortization (to get so-called "EBITDA" earnings) and you actually have a little profit of $1 million.
A recent ratings upgrade (from sell to hold) is based on higher-than-average revenue growth and management of debt to something manageable. In other words, they now seem poised for growth after some time in the wilderness.
What got them into the wilderness? Well, they have three main markets - Texas, California, and the northeast. Construction has been down all over, but especially here. This has created something like pent-up demand (especially in areas like highways) where USCR does a lot of its business. Which is why, despite its financial results, the stock is up 73% year-to-date. It still has lots of room to run before it gets near its 52-week high, so those who play small caps say buy.
CEO Bill Sandbrook (great name for a concrete guy) was appointed in 2011. He's a former military officer who made his mark in building concrete (as opposed to road concrete). He is basically an operations guy, who has spent his first year in charge getting a handle on operations.
If you're bullish on the U.S. economy, on road and skyscraper construction, you may have good reason to be bullish on USCR.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.