Risk is all part of the equation when it comes to investing. If a particular sector or company appears to be at a low, there may well be opportunity for long-term profit if that sector turns around. The prospect of a loss is always there but so is the prospect of a very large profit. In a general way, this perspective all depends upon one’s tolerance for risk and reward.
Ready Mix Inc., a manufacturer, distributor and installer of readymade concrete, works to mine and mix concrete for the full spectrum of construction opportunities. The company works primarily in the south- western United States.
Although one might suspect economic conditions would diminish economic value of a construction materials company (and they would likely be correct), they would also be missing investment opportunity. As infrastructure spending and a return to building occurs, these types of companies will be a solid opportunity.
Ready Mix concrete, a trade associated name, is one such company that may benefit in this regard. Its solidly vertical production structure and reasonable price seems to make it ripe for long-term investment. Stock price may be at a bargain level with those that invest in the southwest development process likely to benefit. In this regard, one might simply reference the full spectrum of projects that the company has won. Roadways, school projects, commercial projects such as Lowes and Coca-Cola along with residential condominium operations demonstrate the company’s integration within the region.
Addressing the current state of the economy, however, should be a consideration. The stock price of the company is attractive but at the same time an indicator of the risk that one may be taking. This is the crux of the opportunity. Construction in this particular region will return at some point. When is the question. Ready Mix concrete appears to have a solid base in place and the background to support it. It may be at a low ,but if one might be interested in a “flier” of sorts, it may be worth investigating.
Let us hear your thoughts below: