TRG | The Bottom Line – 7/5

This past week marked July 4th celebrations throughout the U.S. TRG’s own George Washington Thompson placed second in the Sewanee (TN) July 4th Mutt Show, facing stiff competition from an array of “mutts” of all shapes and sizes. As we reflect on 1H’24 stock performance, there have been an array of stock winners and losers this year. Of TRG coverage, ROAD tops the charts with the best one-year return (+76%) and YTD return (+27%), despite the broad heavy materials group underperforming the overall market since April. Heavy materials names have been off low to mid-teens on a percentage basis since early April versus an S&P 500 increase of 5% over the same time period. The one notable “less bad” outlier was ROAD (down a more modest 7%). In part, the group was a victim of their own success, with stocks coming off of high highs, fueling profit taking. Overall, long-term holders are sitting tight, the industrial sector will continue to be an investor focus for many months, and the Street is focused on value hunting for ideas. Other notable one-year winners, all up 60%+, include TILE, KNF, SCS and HNI. On the other end of the spectrum, JELD continues to struggle as the company undergoes a turnaround with new management, the stock off 23% over the past 12 months and off 29% YTD. Next week TRG will kick our quarterly “survey season” with the publication of our Q2’24 Heavy Materials Survey and our Q2’24 Contractor & Surety Survey, setting the stage for what to expect in upcoming Q2 earnings season.