the Investment Column: Hanson
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Hanson
HANSON now bears almost no relation to the 1980s corporate predator from which it sprang. But the building materials group does have some elements in common with the earlier of the 1970s. It's still a market favourite. The City shrugged off yesterday's trading statement that said profits would be held back by the ending of a waste contract and the closure of one of 's plants, and the shares gained 7.5p to 614p.
The second similarity is its tendency to buy US rivals. Last month it completed the purchase of Jannock, the second-largest US brick maker, for pounds 159.7m; brick companies were 's biggest acquisitions in the early 1970s.
The group, valued at more than pounds 4bn, has strong cash flow and little debt, allowing it to spend another pounds 1bn on acquisitions, probably in the US.
The US government has pledged to spend $167bn (pounds 104m) over six years renewing the road network. is already the third-largest building materials producer in the US, giving it huge potential to benefit from the plan.
Analysts believe the market has still to price in this potential. On forecast earnings per share of 34.8p, is on a forward p/e of 17.5. That's a premium to the sector average of 14, but given its potential the shares are looking good value.
u
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments