Before the New York market opened this morning Vulcan Materials (VMC) announced earnings of 46 cents a share, excluding one time items. That was a full 9 cents a share above Wall Street expectations. Revenue of $996.5 million was up 16.6% year over year and beat Wall Street estimates of $915.68 million.
The company told Wall Street to expect earnings per share of $4.55 to $5.05. The current consensus projection for the year was $4.78 a share.
When I added Vulcan Materials to my Jubak Picks Portfolio back on February 25, 2019, I said I thought this was an infrastructure play that could go higher even without an infrastructure bill in Washington.
Good thing too. Since the chances of an infrastructure bill getting through Congress this year are about as good as the Night King surviving the Battle of Winterfell.
Democratic leaders came out of a meeting this week with President Donald Trump proclaiming their willingness to work with the White House to pass a $2 trillion package of road, bridge, public transportation and other spending. Any momentary optimism that a bill like this might make into into law got shredded when Mick Mulvaney, the head of the Office of Management and Budget (and acting White House chief of staff) plus House Minority Leader  Kevin McCarthy poured freezing water all over any plan by saying that they would not change current tax laws (ncluding the gas tax) to fund any infrastructure package and that they don’t see any way to move forward on any legislation with Democrats as long as the party persists in investigating President Trump.
So Vulcan will have to get along on present trends on pricing and gains in efficiency–which are very positive–and let dreams of infrastructure spending dance in investors’ heads.The shares are up 15.9% from my initial pick as of the close today May 2 to $129.20. I’m raising my target price to $136 today from the prior $132 a share.
