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Construction Sector in Early Stages of Long-Term Recovery: A Wall Street Transcript Interview with Todd Vencil, Research Analyst Covering Industrials and Building Materials Companies for Sterne Agee & Leach, Inc.

67 WALL STREET, New York - April 16, 2014 - The Wall Street Transcript has just published its Building Materials, Residential Construction and Housing Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Construction Equipment Replacement Trends - Growth in Equipment Leasing Adoption Rates - Infrastructure Build in Emerging Markets - Energy Infrastructure Companies - Infrastructure Spending - Production Rates in Capital Goods - Opportunities in Domestic Shale Infrastructure - Increased Rental Demand

Companies include: AO Smith Corp. (AOS), USG Corp. (USG), Vulcan Materials Company (VMC), Martin Marietta Materials Inc. (MLM), Texas Industries Inc. (TXI), Eagle Materials Inc. (EXP) and many others.

In the following excerpt from the Building Materials, Residential Construction and Housing Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How are these companies doing right now overall?

Mr. Vencil: Overall they are doing really well. I was out traveling a few weeks ago talking to the companies, and there is no question these management teams are confident and more positive than they have been in years. These are companies that have national exposures, and what they were saying that I thought was interesting is two years ago this time, the conversation we were having was we think this might be the year that things start to recover. In 2013 in the spring time the conversation was things are definitely starting to recover, but it's really spotty, and what I'm hearing now is things are starting to recover everywhere and in every end market. Things are at different stages; the recovery in Texas is a lot further along than the recovery in Florida, but everything appears to be moving the right way.

TWST: Is the residential piece doing better in some regions and worse in others, or are you seeing improvement across the board?

Mr. Vencil: It is across the board. The companies that were more levered to residential construction started improving first. As an example, I cover USG (USG), which makes wallboard, and they started seeing volume growth really back in 2012, and not coincidentally they also started seeing the prices of the products improving pretty sharply in early 2012.

At the other end of the spectrum, I cover a couple of companies that are primarily only involved in making aggregates like rock and sand, Vulcan Materials (VMC) and Martin Marietta Materials (MLM). Those guys really have not yet seen a good solid year of volume growth, and we think this is probably the year that you see that. That may have something to do with where they are located. A lot of their materials go to highways and public works, and that's generally slower to recover than some other sectors. A second problem here had to do with last year's weather. Weather doesn't hurt wallboard as much because putting up wallboard is an indoor sport, whereas using rocks is entirely an outdoor sport.

TWST: Supply chains are fairly dramatically different, I assume, with aggregates in a very different category than other companies. Is supply an issue at all for these companies?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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