What happened

Shares of US Concrete (NASDAQ:USCR) jumped more than 20% last month, according to data from S&P Global Market Intelligence. The strong monthly stock performance followed a nearly 29% drop in October and doesn't come close to erasing the 55% year-to-date slide, but investors are hoping it's the beginning of a long-awaited recovery. Considering the leap higher was driven by solid third-quarter 2018 operating results, that hope may not be misplaced. 

US Concrete delivered record quarterly revenue, laid to rest any concerns about its highly criticized acquisition of aggregate producer Polaris Materials in late 2017, and has generated more cash flow from operations through the first nine months of 2018 than it did in the year-ago period. It puts the company on solid financial and operational footing as the year draws to a close.

Toy construction workers building successively taller stacks of coin columns.

Image source: Getty Images.

So what

The business continued on its impressive long-term growth trend in the third quarter of 2018. Ready-mix concrete revenue climbed 7% from last year on sales volume growth of just 5.8%, highlighting stronger selling prices. Meanwhile, Polaris Materials comprised nearly half of revenue and sales volumes in the aggregate segment, aggregate being the gravel material comprising the bulk of cement. While gross margin in the segment declined from the year-ago period, that's due to selling higher volumes of slightly lower-value aggregate products.

The one blemish so far this year is that operating expenses have risen more quickly than revenue, primarily driven by integrating recent acquisitions. While operating income growth resumed in the most recent quarter, it's something investors will want to keep an eye on, especially considering management's trigger-happy tendency. 

Now what

US Concrete stock hasn't been able to outrun the devastating impact from a short-seller report issued earlier this year. However, that may be beginning to change. If the business continues its current pace of growth, keeps a lid on operating expenses, and can score big wins from the upcoming Los Angeles Summer Olympics in 2028, which Polaris Materials is poised to cash in on, then investors can expect the recovery in shares to continue -- albeit with a hiccup here and there.

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