For Immediate Release
Chicago, IL – September 6, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include North American Construction Group Ltd. (NOA - Free Report) , Continental Building Products, Inc. (CBPX - Free Report) , Patrick Industries, Inc. (PATK - Free Report) , Jacobs Engineering Group Inc. (JEC - Free Report) and D.R. Horton, Inc. (DHI - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
Construction Spending Picks Up: 5 Stock Recommendations
A spur in homebuilding activity and publicly-funded building of schools and highways has led to an uptick in U.S. construction spending in July. The U.S. Census Bureau of the Department of Commerce said on Tuesday that construction spending for the month was estimated at a seasonally adjusted annual rate of $1.32 billion, 0.1% above the revised June estimate of $1.31 billion.
The July figure is 5.8% above the July 2017 estimate of $1.24 billion. In fact, through the first seven months of the year, spending was 5.2% higher than in the same period of 2017.
Homebuilding & Public Sectors Remain Strong
Spending on public construction projects rose 0.7% in July, after taking a 1.7% hit in June. Under the public construction umbrella, educational construction jumped 2.1% and highway construction inched up 0.4%.
Meanwhile, private outlays slipped 0.1% in July after decreasing 0.5% in June. Of the total private outlay, residential construction ticked up 0.6% from June following two straight months of declines. Meanwhile, nonresidential construction (comprising offices, stores, factories and other buildings) dropped 1% in the month, marking the steepest decline since August 2017 and followed a 0.1% gain in June.
Notably, residential construction grew 6.6% from July 2017 with new single-family and multi-family construction increasing a respective 6% and 1.1%.
Undeniably, there have been indications that the thriving housing market is losing steam of late. Factors like increasing construction costs, dearth of skilled labor and rising prices of homes owing to higher mortgage rates continue to make things difficult. Meanwhile, builders are perturbed by higher aluminum and steel costs, courtesy of the newly-imposed tariffs. This, coupled with increased lumber prices owing to an import tariff, is eating into builders’ margins.
Nonetheless, builders continue to report strong demand for new houses, fueled by steady job and income growth along with rising household formations. New home sales figure was 12.8% higher in July than last year, reflecting strong demand for homes as the economy continues to create jobs.
The housing market is expected to gradually recover through the rest of the year, backed by a solid ongoing job market, economic growth and lower taxes. The U.S. economy expanded at a 4.2% annual pace in the second quarter, almost double of first quarter’s 2.2% and the strongest figure since third-quarter 2014. Growth is trending higher in the world's largest economy this year and is on track to reach Trump's annual growth target of 3%.
Overall, the construction industry is on track to continue its positive growth trend, courtesy of stellar economic growth and Trump’s drive to boost the infrastructure of the country. Trump’s long-awaited $1.5-trillion infrastructure plan will likely call for more building and infrastructure spending in the near future, in turn boosting revenues and profitability of construction companies.
Picking the Right Stocks
Owing to the month-to-month volatility, investment in the construction sector at times becomes difficult. Investors need to be cautious while picking value stocks.
We have shortlisted construction stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) with a VGM Score of A or B. These stocks also have an expected earnings growth of more than 10% for the current year. Back-tested results have shown that stocks with a Style Score of A or B coupled with a bullish Zacks Rank are the best investment options. You can see the complete list of today’s Zacks #1 Rank stocks here.
North American Construction Group Ltd., a heavy construction and mining service provider, sports a Zacks Rank #1 and a VGM Score of A. The company’s earnings are expected to witness a stellar 228.6% growth this year.
Continental Building Products, Inc. also sports a Zacks Rank #1 and a VGM Score of A. This manufacturer of gypsum wallboard, joint compound and complementary finishing products has an expected earnings growth rate of 50.4% for this year.
Patrick Industries, Inc. also carries a Zacks Rank #1 and a VGM Score of A. The company is a major manufacturer of component products and distributor of building products and materials for the Recreational Vehicle, Manufactured Housing and Marine industries. The company has an expected earnings growth rate of 49.4% for 2018.
Jacobs Engineering Group Inc., a technical, professional, and construction service provider, carries a Zacks Rank #2 and a VGM Score of B. Earrings of the company are expected to register 25.2% growth in 2018.
D.R. Horton, Inc., one of the leading national homebuilders, carries a Zacks Rank #2 and a VGM Score of A. The stock has a solid expected earnings growth of 41.2% for the current year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.