We recently compiled a list of the 10 Best Construction Stocks to Buy Now. In this article, we are going to take a look at where Tecnoglass Inc. (NYSE:TGLS) stands against the other construction stocks.
As per Cumming Group, which provides project and cost-management services, the construction industry kicked off 2025 with a healthy momentum, thanks to the robust fundamentals from 2024. The firm also mentioned that the Dodge Momentum Index (DMI), which helps measure non-residential building spending, demonstrated steady growth as it wrapped up 2024 with a healthy 10% increase, implying confidence in owners and developers. Overall, the commercial real estate sector continues to witness a significant evolution, mainly in office spaces, where work-from-home and hybrid work arrangements transformed occupancy trends.
Outlook for the Construction Sector
Amidst increased interest rates, uncertainty related to various tariffs, and price inflation impacting residential and commercial segments, Cumming Group opines that positive indicators are also emerging. The construction investment, mainly fueled by government spending, has been providing much-needed stability to the broader sector. Moving forward, the sector’s ongoing resilience and adaptability place it well for the year 2025, despite uncertainty regarding tariffs. Apart from this uncertainty, healthy employment numbers, and consistent government investment, together with potential interest rate relief, create a strong foundation for sustained growth.
As per PHCPPros, which covers aspects of the plumbing, heating, cooling, and piping industry, ConstructConnect’s 2025 forecast for a total construction spending increase of 8.5% is broad-based, with residential and non-residential building construction projected to expand by 12% and 8%, respectively.
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Key Drivers Likely to Boost the Construction Sector
PHCPPros opines that the declining interest rates due to the US Fed’s focus on reducing Fed Funds Rate, an instrument indirectly influencing the private sector borrowing rates, is likely to be the primary driver of the growth. The reduced rates are expected to help reinvigorate non-residential construction activity and residential housing market activity. Notably, lower rates and the ensuing improvement in housing affordability can ease the gridlock in sales due to the combination of increased home prices and elevated interest rates.
Furthermore, the electrification of the economy is expected to fuel strong demand for power generation and power infrastructure projects. The growth of AI, higher EV adoption, and the increased dependency on electric appliances and devices are expected to stimulate the need for electric generation and infrastructure construction moving forward. These measures are expected to fuel the demand for megaprojects.
Our Methodology
To list the 10 Best Construction Stocks to Buy Now, we used a screener to shortlist companies catering to the broader construction sector. Next, we filtered out the ones that were popular among hedge funds. Finally, the stocks were arranged in ascending order of their hedge fund sentiments, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A construction crew building a modern, energy-efficient skyscraper with a curtain wall of aluminum.
Tecnoglass Inc. (NYSE:TGLS)
Number of Hedge Fund Holders: 17
Tecnoglass Inc. (NYSE:TGLS) is engaged in manufacturing, supplying, and installing architectural glass, windows, and associated aluminum and vinyl products for commercial and residential construction markets. The company’s vertically integrated model remains a critical differentiator, allowing it to control costs and swiftly adapt to market dynamics. The investments in automation and advanced manufacturing have been yielding significant returns, improving Tecnoglass Inc. (NYSE:TGLS)’s operational efficiency and capacity to address the growing demand for innovative products. These factors aided strong gross profit and Adjusted EBITDA growth in Q3 2024.
The company reported gross margin of 45.8%, reflecting a rise of 290 bps YoY, while adjusted EBITDA came in at $81.4 Million, up 14.2% YoY. Tecnoglass Inc. (NYSE:TGLS) remains well-placed to capitalize on long-term growth opportunities in both residential and commercial markets, courtesy of its strong balance sheet and cash generation capabilities. Moving forward, Tecnoglass Inc. (NYSE:TGLS) is focused on leveraging its core strengths, vertically integrated operations, strategic geographic positioning, and innovative product portfolio.
It will continue to pursue multiple avenues for growth, such as expansion of its vinyl window business, strengthening its presence in key markets via a growing netw
Overall TGLS ranks 9th on our list of the best construction stocks to buy. While we acknowledge the potential of TGLS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than TGLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.