EXP

Eagle Materials Inc

Industrial/Transportation


Presented:03/28/2016
Price:$69.10
Cap:$3.44B
Current Price:$295.70
Cap:$9.94B

Presented

Date03/28/2016
Price$69.10
Market Cap$3.44B
Ent Value$3.49B
P/E Ratio21.66x
Book Value$21.28
Div Yield0.58%
Shares O/S49.77M
Ave Daily Vol867,342
Short Int4.49%

Current

Price$295.70
Market Cap$9.94B
Eagle Materials, Inc. is engaged in the manufacturing and distribution of gypsum wallboard and cement. The company operates through four reportable segments: Cement, Concrete & Aggregates, Gypsum Wallboard and Recycled Paperboard. The Cement segment consists of raw material used in the production of portland cement which is calcium carbonate in the form of limestone. The Concrete & Aggregates segment consists of ready mix concrete, a building material which is used in construction. The Gypsum Wallboard segment consists of natural gypsum rock which is used in the manufacture of gypsum wallboard. The Recycled Paperboard segment includes paper fiber, water and paper chemicals and these recycled paperboards are sold to gypsum wallboard manufacturers. Eagle Materials was formerly known as Centex Construction Products, Inc. The company was founded in 1963 and is headquartered in Dallas, TX.

Publicly traded companies mentioned herein: Eagle Materials Inc (EXP), USG Corporation (USG)

Highlights

In 2015 Eagle Materials (EXP) experienced a number of headwinds - including an inability to raise wallboard prices and the drastic underperformance of its frac sand business - that sent shares lower in the back half of the year (and into early 2016). While the stock has recovered from the high $40s and now sits at ~$69, the presenter said, “A gap still exists between perception and reality with respect to wallboard pricing”. He believes raw material inflation will allow EXP to raise prices in 2016, and if this occurs, he believes shares will trade materially higher. In his opinion the stock is cheap at 8x forward EBITDA estimates and Net Debt of 1x is low, providing for a favorable risk/reward setup and entry point for a long position.

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Idea Discussion

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