Summit Materials - the market is wrong

i4value
2023-04-24

$Summit Materials(SUM)$ is a US construction materials company. As can be seen from the chart, it had achieved considerable growth over the past 8 years.

SUM Product Revenue Trends

You could be forgiven for thinking that this is a growth stock. It is not.

  • Revenue growth was due to acquisitions that benefited from being in the uptrend part of the construction cycle.

  • Revenue growth did not translate into better operating performance. Without the one-off gains, current ROE would be in single digits.

The market is pricing SUM as if it was a growth stock. The market is wrong.

I am a long-term value investor looking for opportunities due to mispricing. SUM is not one of them. If you want more value investing insights, visit my blog at i4value.asia,

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Raquelz
    2023-04-25
    Raquelz
    Great ariticle, would you like to share it?
  • Mypek
    2023-04-24
    Mypek

    Great ariticle, would you like to share it?

  • ctkoon
    2023-04-25
    ctkoon
    👍
  • Matachiko
    2023-04-25
    Matachiko

    Ok

  • AuntieAaA
    2023-04-24
    AuntieAaA
    OKAY
  • phongy 45
    2023-04-24
    phongy 45
    ok
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