Fidelity Contrafund Loads Up On These Unglamorous, But Basing Stocks

CRH (CRH) issued solid earnings and guidance Friday, underpinned by infrastructure spending in North America. CRH stock jumped nearer to a buy point, with other construction stocks also in bases.

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Top mutual fund Fidelity Contrafund significantly raised its bet on CRH ahead of its earnings report, MarketSurge data shows.

Infrastructure Spending Drives CRH Earnings

The producer of cement, asphalt and other building products posted a 2% rise in revenue during the seasonally quiet March quarter, to $6.5 billion. This sent EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) up 15% to $445 million. On a per-share basis, CRH earned 16 cents, swinging from a loss of five cents a year ago.

The North American market offset weakness in Europe. “Early-season project activity and favorable weather in certain regions of North America” drove sales during the quarter, the earnings release said. Positive pricing momentum and key acquisitions also bolstered results, the company said.

Although based in Dublin, CRH is the biggest roadbuilder in North America. As such, CRH is benefiting from President Joe Biden’s $1.2 trillion infrastructure bill, including road-building projects.

On Friday, CRH backed full-year 2024 EPS guidance of $5.15-$5.45. The company said it would continue share buybacks. It declared its latest quarterly dividend of 35 cents a share.

Fidelity Contrafund Bets More On CRH Stock

Shares surged 4.3% to 83.79 on the stock market today. CRH stock jumped above the 50-day moving average, lifting it up the right side of a seven-week flat base. The stock is closing in on an 88 buy point, MarketSurge pattern recognition shows.

Building-related industry groups continue to perform well. The cement, concrete and aggregates group ranks a lofty No. 20 out of 197 industry groups tracked by IBD.

The group includes Eagle Materials (EXP), Vulcan Materials (VMC) and Martin Marietta (MLM), all setting up before, or after, earnings reports. All are basing and 1% to 2% below their 52-week highs, which are also buy points.

Fidelity Contrafund increased its positions in CRH stock and Martin Marietta by fivefold in the March quarter, fund ownership data tracked by MarketSurge show. In addition, the top mutual fund upped its Vulcan Materials stake by a third.

All are small positions in Fidelity Contrafund’s portfolio, which is dominated by Meta (META) and other growth stocks.

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