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Construction Stocks Climb As Industry Data Improve

Post Time:Jan 10,2012Classify:Industry NewsView:329


Building and construction-related industry groups advanced in December as industry data hinted at improving conditions.


Housing starts data for November, released by the Census Bureau Dec. 20, showed multiunit projects surged 181% year-over-year. Construction spending, reported Tuesday, rose 2.7% vs. year ago levels. Nonresidential spending was the hot category, up 4.4%.


Both gauges remain well below their 2006 peaks. But combined they suggest the construction industry may be starting to climb out of its trough.


IBD tracks nine building sector industries. All but two of those advanced within the industry rankings in December. That put five of the groups in the top 50 industries. At the top of the list, the cement, concrete and aggregates group ranked No. 2 on Thursday. The wood products group ranked No. 25 and maintenance and building services stocks ranked No. 26.


Few stocks in those groups offer anything close to leadership potential. The most interesting candidates are thinly traded, such as United States Lime & Minerals (


The industry's bellwether stocks, names like Ryland Group (


The group has climbed to a No. 87 ranking as Ryland, D.R. Horton and others in the group gained for a third straight month.


But the group's fundamentals have not picked up. All of its 18 stocks hold EPS Ratings below 57.


The best way for investors to tap a possible turnaround in the sector may be through the Retail/Wholesale-Building Products group. It rose to a top 20 rank in November and ranked No. 12 Thursday.


The largest companies in the group are Home Depot (


The other leaders, W.W. Grainger (


Source: http://www.usgnn.comAuthor: shangyi

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