Should You Buy It? Vulcan Materials

Vulcan Materials (VMC - commentary - Cramer's Take) has had a rough start to 2009, with the shares down nearly 8% year-to-date, closing Wednesday at $64.00. Prior to that, the stock had gained nearly 72% between Nov. 21 lows and the end of 2008 because of some short-covering and the snapback in infrastructure from the stimulus plan proposed by the next President.

Vulcan would definitely benefit from increased building activity, especially if it means new highways and bridges. The company is the largest producer of construction materials like crushed stone, gravel and sand in the world, and also sells asphalt and concrete. In November 2007, Vulcan increased its scale with the $4.5 billion purchase of competitor Florida Rock Industries.

With that in mind, I'm here to answer readers' questions: Should you buy it? Does this pure-play infrastructure name have several years of growth ahead of it, or is the recent rally from the lows already pricing in a lot of good news for Vulcan?

The company isn't expected to post fourth-quarter results for another month, but management significantly lowered the market's future expectations for Vulcan the last time it reported back in November.

The company missed the third-quarter consensus analyst earnings estimate of 84 cents a share as margins were hurt by higher energy costs. Management also said that the credit crunch cut into customers' ability to buy Vulcan's products.

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David Peltier is a research associate at TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback; click here to send him an email.

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