Vulcan Materials: For Now, Stand Aside

Vulcan's sin: being a leading producer of cement in Florida -- a market that tanked big-time, when the housing boom ended. What Wall Street 'forgot,' was that VMC is also a major producer of asphalt and concrete, and that it shipped aggregates to 23 states, as well as to Mexico, the Bahamas, Canada and Chile. So far, the latter narrative has failed to take hold, and Vulcan's shares have meandered.

The First Call FY2010/FY2011 EPS estimates for VMC are 42 cents to $1.34.

Technically, as noted Vulcan's stock has struggled with the key, 50-day moving average. I'll need to see an acceleration above the 50-day MA to clear-up the clouded picture.

2010 Outlook: I would not add to a Vulcan position at this time, and if you don't own the stock already, stand aside. I'd also revise the sell/stop loss to $37 from $22.

I'll re-review Vulcan in a month or so, or as conditions warrant.

Stock Analysis: I consider Vulcan Materials to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. And I'd put a revised sell/stop loss at: $37.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.