Market's view on Forterra
Published on April 2024
- Positive sentiment on cyclical stock’s value due to favourable SCVR report.
- Consensus that the stock is not for short-term gain but should be valued based on average profits over a 5-10 year period.
- Predictions of further earnings downgrades despite recent profit warnings.
- Mixed opinions on the stock’s pricing, with some viewing it as overpriced in the current market.
- Concerns about increased debt and reduced profit expectations.
- Discussions on potential factors that could reignite demand, including political changes or interest rate cuts.
- Agreement on adopting a ‘wait and see’ approach due to economic uncertainties.
- Brexit perceived as not affecting transport costs, providing some protection against foreign competition.
- Discussion on the economic moat provided by barriers such as clay reserves and disciplined competition.
- Recognition of industry challenges including competition from imports and the need for economic recovery.
- Company’s response to market conditions by reducing shifts and mothballing a factory.
- Critique of management decisions, particularly the poor acquisition of Bison Precast.
- Historical perspective on share sales and reflections on the company’s management and strategic direction.
- Ongoing concerns about the completion of the earnings downgrade cycle and potential for continued financial disappointments.
- Debates over the liability and lifespan of products used in infrastructure projects built in the 1960s and 70s.