US homebuilders

US homebuilders reflecting a Fed intent on a “hard stop”, to wring excess inflation out of the system. Too soon to go back in for JHX or RWC, in our view.

That said we have some dissonance of our own, in this regard. We hold Adbri, ABC, the concrete company, which has been crushed by raw material input pricing (coal, diesel, electricity) squeezing margins.

Price increases operating at a 3 month lag, according to management commentary, so they will, to a large extent, be offset over the coming quarters.

Housing a good chunk of the business, in part that’s why the stock has de-rated alongside CSR, BLD and FBU, but it does have a very solid infrastructure and resources/engineering exposure, which is expected to perform quite well, weather permitting.

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