A good way to find new stock ideas is to scroll through the Zacks Industry Rank page. From this page you can see the breakdown of 252 different industries and then drill down to the stocks in each industry.
This can help you locate industry’s that are trading more along the lines of value stocks (those with low forward PE and low book values) and those that have higher earnings growth rates.
One page in particular, the heat map, shows which industries have been moving up the rank over the last few weeks. That led me to the Building Products – Concrete and Aggregates group.
Moving Up The Charts
On April 15, the building products –concrete and aggregates was #182, but over the next few weeks, the rank improved to #166, #105, #87 and last week made it to #15 where it remains for another week.
So what are the best stocks from this strong group and will they remain this strong?
There are three stocks with a Zacks Rank #1 (Strong Buy) and two stocks that have a Zacks Rank #2 (Buy). You can view the list here (https://www.zacks.com/stocks/industry-rank/industry/building-products-concrete-and-aggregates-27).
With a forward multiple of only 17x forward earnings, US Concrete (USCR – Free Report) looks rather appealing given that it is a Zacks Rank #1 (Strong Buy). The stock also has a growth style score of A so there is a lot to like here. If the Trump Administration can stick to its idea of infrastructure stimulus then this stock, and the rest of the group, stand to see some outsized gains.
Summit Materials (SUM – Free Report) is another Zacks Rank #1 (Strong Buy). This stock has a C for Value and an F for Growth, so as the aggressive growth stock strategist I am not all that excited about this stock. SUM has missed the mark on the last two earnings reports, but the stock has seen some positive earnings estimate revisions (https://www.zacks.com/stock/quote/SUM/detailed-estimates) over the past 30 days which is why the stock is a Zacks Rank #1 (Strong Buy).
Finally I going with a name that I have held in the past when I managed Home Run Investor, a service that looks for the best small and mid cap stocks with solid Zacks Ranks. Eagle Materials (EXP – Free Report) is a Zacks Rank #2 (Buy) and it has a growth style score of “A” so you know I like it already. EXP also has a forward earnings multiple of only 18, which is the average for the group.