A Big Upgrade for Vulcan Materials

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After Vulcan Materials (NYSE: VMC  ) spent most of the last year at a three-star rank, enough top-performing CAPS members have turned bullish on it recently to upgrade it all the way up to five stars. A total of 508 members have given their opinion on the construction materials supplier, with many of them offering analysis and commentary explaining the recent optimism.

Vulcan Materials anticipates higher demand for construction materials in 2010 because the company benefits from U.S. government stimulus dollars that are finally starting to trickle down into contracts. It's felt the effects of the recession that also put pressure on infrastructure-related companies like Foster Wheeler (Nasdaq: FWLT  ) , Fluor (NYSE: FLR  ) , McDermott (NYSE: MDR  ) , and Manitowoc (NYSE: MTW  ) , but many CAPS members think it's now poised for a solid rebound. While Vulcan saw an uptick in award activity in the fourth quarter, it expects this year to be the biggest year for stimulus-related demand for its products.

Stimulus money is going lots of places, including to railroad CSX (NYSE: CSX  ) , which will modify bridges and tunnels to expand freight capacity for the railway industry in the face of volume declines. Many investors expect Vulcan to be a direct and possibly indirect beneficiary of various stimulus projects, and they see the government spending carrying it through to 2011. When stimulus-related demand begins to taper, Vulcan looks for improvement in residential and private construction to take shape -- an improvement retailers like Home Depot (NYSE: HD  ) would like to see. With improving free cash flow in 2009 and Vulcan's solid position as an aggregates supplier, CAPS members like the road ahead.

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