Michael Rome of Long Focus Capital presented his in-depth investment thesis on US Concrete (Nasdaq: USCR) at Best Ideas 2018.
US Concrete is a construction materials company focused on Texas, California, New York, and New Jersey. Through the acquisition of aggregates assets, the company has become more vertically integrated and has improved the mix. Michael believes this should be rewarded with a higher multiple.
In addition, USCR sales are entirely U.S.-based and benefit from corporate tax reform. Michael views EPS estimates as too low, as sell-side analysts forecast $6 in 2019. Michael expects EPS of $9 in 2019. With high short interest, a reasonable valuation, and rising estimates, the stock could double within two years, according to Michael.
About the instructor:
Michael Rome started his career at DLJ equity research. He then worked as an analyst at Capital Research based in Los Angeles. Since then, he has worked as a long/short equity portfolio manager at several hedge funds included SAC, Diamondback and Nomura. He has covered various sectors but is most experienced within the industrials/materials space. He received his MBA from Wharton, a BA from Washington University in St. Louis and has a CFA. He is now working with Long Focus Capital, which is a family office hedge fund run by John Helmers.
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