Vulcan Materials Stock Symmetrical Triangle On Possible Earnings Beat
Vulcan Materials stock has formed a Symmetrical Triangle on a possible earnings beat when they report on August 1, 2017. I like the chart setup enough to go long this stock in my personal trading account.
Vulcan Materials News
Kiplinger’s Personal Finance called Vulcan Materials the best stock in Alabama (here). Kiplinger writes:
Vulcan is trading near an all-time high thanks to a run-up in the stocks of building-materials companies following the presidential election. And if the current administration goes forward with its plan to spend $1 trillion to revamp the nation’s infrastructure, few companies stand to benefit more than Vulcan.
Vulcan Materials Stock Chart
VMC shows a beautiful positive divergence between the Effective Volume study of large players volume and the price chart. The Twiggs Money Flow does not support the large players volume but does appear to be rounding up.
Prices have been consolidating lately and the volatility has been reduced. The chart is very close to forming a momentum squeeze setup.
The TSI has given a beautiful buy signal on a bullish cross.
There is a support zone below the current price at $126.44, a stop order could be placed below this zone.
The chart looks like a good setup as we head into the August 1, 2017 earnings report which is likely to beat IMO. This is a short-term swing long trade with a sell either before, or the day after, earnings.
What do you think about Vulcan Materials stock? Leave your comment below.
Vulcan Materials Review
- Profitability (Return On Assets, Return On Equity, and Profit Margin)
- Valuation (P/E, Forward P/E, PEG, Book Value, Price to Book Ratio)
- Growth (EPS and Revenue)
- Health (Current Ratio, Quick Ratio, Debt to Equity, Altman-Z Score)
The Profitability of Vulcan Materials is ok. VMC's Return On Asserts of 4.70% is among the best of the industry. VMC does better than the industry average Return On Assets of 0.40%. VMC has a Profit Margin of 132%. This is better than the industry average of 104.3%. However where the company lags is its Return On Equity (ROE). VMC has a ROE of 8.8%. This is below the industry average of 10.32%. A whopping 80% of the industry peers outperform VMC on the ROE.
The valuation of VMC is a bit pricey. The PEG Ratio, which compensates the Price/Earnings for growth, indicates a correct valuation of the company. When comparing the current price to the book value of VMC, we can conclude it is valuated correctly. It is trading at 3.74 times its book value. The Price/Earnings Ratio is 40.94, which means the current valuation is very expensive for VMC. With a Price/Earning Ratio of 40.94, VMC is valued higher than the industry average, which is at 31.56. 80% of the companies listed in the same industry are cheaper than VMC. The Forward Price/Earnings Ratio of 30.90 indicates a quite expensive current valuation of VMC. Compared to an average industry price book ratio of 2.17, VMC is valuated more expensive than its industry peers. 84% of the companies listed in the same industry are valuated cheaper.
VMC has a good growth rating. VMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.83%, which is quite impressive. Based on estimates for the next 2 years, the EPS will grow by 39.38% on average per year. The EPS growth is accelerating: in the next 2 years the growth will be better than in the last year. Revenue has been growing slightly by 8.02% on average over the past 5 years. However VMC shows negative growth in Earnings Per Share. Measured over the last 5 years, the EPS has been decreasing by -132.16% yearly.
VMC has a good health rating. A Current Ratio of 3.21 indicates that VMC has no problem at all paying its short term obligations. A Quick Ratio of 2.20 confirms that VMC has no problem at all paying its short term obligations. An Altman-Z score of 3.34 indicates that VMC is not in any danger for bankruptcy at the moment. VMC is in better financial health than average in its industry. Its Altman-Z score is much better than the industry average of 2.07. The Current Ratio is inline with the industry averages, which is at 2.73. The Quick Ratio is inline with the industry averages, which is at 2.17. Compared to an average industry Debt to Equity Ratio of 0.41, VMC is a more dependent on financing than its industry peers.
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