I've owned VMC for a long time, long enough for it to have lost much of what I initially put into it, and the loss has been enough that there didn't seem to be any reason to sell to realize on what little was left.
So I still own it and now that it's showing some signs of life, and I wonder if there is anything sparking that other than the recently announced deal with Lafarge to supply a couple of electrified trucks - is there any justifiable reason to be optimistic that VMC might pick itself up off the floor, dust itself off and generate some return for long suffering owners such as myself?
I look forward to your thoughts.
Thanks!
Peter
VMC experienced a cyclical boom and bust in revenue growth over the last few years due to the nature of its product demand. The company is still unprofitable and burning cash; VMC sustains its business largely through share issuance. The balance sheet has net debt of $10M. However, the bright spot is based on consensus estimates, with sales expected to grow by more than 100% over the next two years as the company ramps up production, and it expects to be EBIT positive in FY 2024. The recent deal with Lafarge Canada could make that growth prediction more certain, which could help the share price. VMC is quite a small and speculative name, almost similar to venture capital type of investment. We consider the name to be highly volatile, but we would be okay to hold the stock with a very conservative allocation given the upside potential.