No glamour in cement but we think the market is being too harsh on Adelaide Brighton (ABC)

No glamour in cement but we think the market is being too harsh on Adelaide Brighton (ABC). ABC rarely finds favour among broking analysts, but with the stock currently trading at less than 13 times 1 year forward PE (well below all of its peers), we think the market has been much too harsh. The company is highly cash generative and pays a consistently solid dividend (currently 5% yield). The market hardly applauded recent acquisitions which were well planned. The long term strategic positioning is just further evidence of good management which a decade ago put in place a comprehensive clinker import strategy which now leaves the company in a sound competitive position as the $A weakens. The balance sheet has capacity for further such clever strategic moves which will enable price expansion as well as volume gains. Sure there's no glam in cement, but this stock can perform.