Construction Stocks, an Alternative to Home Builders
On Monday, we learned that construction spending rose by a better than expected 1.4% in October, as the construction sector is becoming a bright spot for the U.S. economy. Compare this to manufacturing. Also on Monday we learned that the national reading of the ISM Manufacturing Index unexpectedly contracted to 49.5 in November.
Today I profile 14 construction stocks and five of them being upgraded this morning, four to buy from hold and one from sell to hold.
On Nov. 28 I wrote Homebuilders Are Risky Bets Despite Positive Data and six of the eight home builder stocks profiled had triple-digit gains of 120.7% to 325.6% over the last 12 months. For the 14 construction stocks only two had triple-digit gains of 119.1% and 148.9%.
Investors who want exposure to the construction sector should consider the stocks in today's table. Upgrades and underperformance are two reasons to consider buy-and-trade strategies in construction stocks after booking profits on the home builders.
Reading the Table
OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.
VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.
Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last twelve months. Stocks with a black number increased by that percentage.
Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next twelve months. Stocks with a black number in the table are projected to move higher by that percentage over the next twelve months.
Value Level: The price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.
Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.
Risky Level: The price at which to enter a GTC limit order to sell on strength. Here are comments on the five construction stocks that were upgraded this morning:
AECOM Technology (ACM) ($22.85): Upgraded to buy from hold this morning according to ValuEngine. The stock is 16.4% undervalue with a favorable trailing 12 month price-to-earnings ratio of 9.9.