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A Wall Street Transcript Interview with Todd Vencil, Research Analyst Covering Industrials and Building Materials Companies for Sterne Agee & Leach, Inc.: Costs Contained for Construction Materials Companies While Demand Builds Rapidly

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: 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?

Mr. Vencil: My coverage list is fairly basic in their product. For example, aggregates companies are just combinations of basic products. For cement companies, the main input for cement is limestone, and so they usually build these things on top of a limestone deposit. They don't typically have to fuss around with bringing rocks in from somewhere else, because that would get ugly.

On the wallboard side, you make wallboard out of gypsum, and you get gypsum from one of two plays. It comes out of the ground, it's a rock, or you can use what's called synthetic gypsum, which is chemically the same thing as natural gypsum, and it's a byproduct of flue gas desulfurization if you use a limestone process to pour sulfur out of, say, a coal-fired power plant's flue stream. There is not a lot of natural gypsum in the East so you have to bring it down from Nova Scotia. But in the last 20 years or so, there has been a big move in the East to move to this flue gas desulfurization. The EPA actually has encouraged the use of this synthetic gypsum in wallboards, so there is this nice matchup where in the West, you've got a lot of gypsum rock and in the East you've got high sulfur coal. So getting close to half the industry now in wallboard is using this synthetic gypsum, but the point would be that the raw materials are all pretty well squared away.

TWST: For your companies, what are some of the biggest challenges they face?

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.