TRG | The Bottom Line – 3/3

In 2019, TRG was the first U.S.-based analyst to pick up coverage of Ferguson (FERG - $28.8B mkt cap), the largest plumbing, HVAC, and building supply distributor to professional contractors and homeowners. TRG in our initiation report quipped that FERG was the “largest company you’ve never heard of.” Part of the issue was FERG, despite having the lion share of earnings coming from North America, was still traded on the London Stock Exchange (LSE). FERG has since made the long journey of switching over to the NYSE, a move that has increased both visibility with sell-side analysts and institutional investors alike. Also taking a chapter from the Ferguson playbook, CRH plc (CRH - $37.8 mkt cap), in conjunction with its Q4’22 trading update, made headlines this past week by announcing a planned move for primary listing to a U.S. exchange. North America now accounts for ~75% of consolidated CRH EBITDA and expectations are for the U.S. market to increase in importance given 1) increased infrastructure funding; 2) renewed drive for onshoring manufacturing to the U.S.; and 3) significant levels of under-build in the residential construction market. Overall, the company sees a primary U.S. listing as a critical driver to support increased “commercial, operational and acquisition opportunities” for CRH. CRH plc intends to remain headquartered in Ireland, but the bigger, more practical trading realities pushes the focus to the U.S. exchanges.