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Vulcan Materials Company Message Board

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  • passolidda passolidda Jun 21, 2009 10:05 PM Flag

    DJ Vulcan Materials Sold 13.2M Shrs At $41 Each

    The stock was 46 on Wed. June 16 when VMC announced they sold
    13.225 mil shrs at 41 = $542,25mil. They received $521 mil.
    Nice $21 mil profit to the underwriters.

    The stock only dropped to a low of $42.82 on Friday and
    subsequently closed Friday at $43.57.
    No where does the sale of 13.225 mil shares show up
    in the Stats.

    Do the underwriters still have the stock? or
    did they make another $20mil.
    Why wasn’t stock offered to the stockholders for $41.?

    Something smells here.

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    • The company raised needed money by selling 11.5 million shares at 41. Combine the dilution of stock with the dividend cut and you have a company that will do very little for a year or two. It seems that the infrastructure "surge" has not developed and the huge current debt probably means very reduced spending on roads and bridges. The Price to Earnings ratio of 48.4 is very poor.Sterne Agee rates it as a SELL and Morningstar sees "weakness" but does not rate the company.

      • 2 Replies to scovey2
      • First, Morningstar give the company it's highest rating; 5 stars. It also says the stock is worth "fair value" $68.

        Having said that, I've traded VMC several times ... buy between $40 and $41 and sell anywhere before it hits $48.

        The big boys (mutual funds, hedgies, etc) won't let this stock fall too far ... at least until they've tired of the game.

        I won't get in this time around because I believe the 2nd dip is coming and "cash is king".


      • You are correct. The PE ratio is outrageous and the market will adjust the stock accordingly. I am in the San Francisco area. The governor has just taken all and I repeat all the local gas tax dollars that would potentially go to road building to help offset the deficit at about 1 billion per year this and next year. They also will like our smart analysts have already said use and infrastructure inflow for "other" areas. This state is in very bad shape and will be so for years. I work for a Berkshire Hathaway company and he has told us that the economy will continue to spiral down for another 2 years or so though not as bad as the past. Florida is similar. The reevaluation of the FRK "goodwill" will gobble their feeble attempt to raise money. This is a good industry to get out of now whether employed there or a stock holder. I told all when I was still employed there to get ready for no 401k match, no bonuses, worthless stock options etc. etc. for years to come. Unfortunately, the ones still left can't get out of the stands and into the game and will just sit with their mouth open for 5-10 years and then wonder why their retirement sucks. Wow people are strange and is Birmingham really that great? Try a vacation out of the state and you might be amazed.

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