What’s Happening to James Hardie’s Share Price?
Since shares in James Hardie [ASX:JHX] closed at $11.85 on the 16th of January, they have risen strongly to trade at $15.62 at the time of writing today.
Why Did This Happen to James Hardie Shares?
The stock market is pricing in stronger earnings to come for the company. The company is exposed to the residential and commercial building sectors, primarily in Australia, the US and Europe. Its major product is fiber cement.
What Now for James Hardie?
If you’re bullish on construction in Europe, the US and Australia, as I am for reasons explained here , James Hardie has a bright outlook for the foreseeable future. The stock market seems to be confirming this view, which is why it’s rerating the stock higher. One risk to be aware, however, is the level of liabilities the company is exposed to in relation to compensation payouts for issues in previous years.
Editor, The Daily Reckoning