3. CRH plc (NYSE:CRH)
Number of Hedge Fund Investors in Q1 2024: 75
CRH plc (NYSE:CRH) is one of the biggest construction raw materials providers in the world. This places it in the enviable position of benefiting from any uptick in global construction activity. Construction, for the most part, does well when the economy is expanding and if governments are investing in infrastructure. Given that construction has been muted globally due to high interest rates, CRH plc (NYSE:CRH) could be well placed to capitalize from potential monetary policy easing when it does take place. Recent comments by Fed Chair Jerome Powell have indicated that loosening might be on the horizon. Additionally, the Biden-Harris Administration has earmarked roughly $2 trillion to upgrade America’s infrastructure and set up new chip manufacturing plants through initiatives such as the CHIPS and Science Act and the Inflation Reduction Act. CRH plc (NYSE:CRH) could see sizeable demand from both these areas, and the fact that it is a multinational company means it can capture a global resurgence in construction too.
CRH plc (NYSE:CRH) remains focused on North America, with roughly 75% of its operating income coming from the region. On this front, here’s what management had to say during the latest earnings call:
Turning to our end markets and first to infrastructure, which represents our largest exposure in North America.
Here, the funding backdrop is robust with demand underpinned by the significant increase in US federal funding through the IIJA as well as positive momentum in transportation funding initiatives at the state level. We also continue to experience good demand in the industrial and manufacturing sectors, which are also supported by significant federal funding and increased onshoring activity. Looking ahead, as the construction season gets fully underway across many of our markets, I’m encouraged by the momentum we’re seeing in our bidding activity and our backlogs, which reflects the significant increase in US infrastructure funds that are now coming through. Next to Americas Building Solutions on Slide 7, which has also experienced a good start to the year, benefiting from positive pricing, cost control and good delivery from recent acquisitions.
Notwithstanding some unfavorable weather conditions and subdued newbuild residential demand impacting activity levels during the first quarter. Our building and infrastructure solutions business continues to benefit from significant public investment and critical utility infrastructure. Outdoor Living Solutions had a good start to the year with first quarter revenues 5% ahead driven by good early season demand in both the retail and professional channels and resilient residential repair and remodel activity. For Americas Building Solutions overall, total revenue growth of 2% translated into a 2% increase in adjusted EBITDA and a further 10 basis points of margin improvement.
