Making Our Unexpected Exit From This Construction Holding as Concerns Arise

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
VMC	Sell	613	$283.50	0	0%

After you receive this alert, we will close out the Portfolio’s position in Vulcan Materials (VMC) by selling all 613 shares at or near $283.50. As we make this move, the return generated by those shares for the Portfolio was more than 60%.

We are making a big and arguably unexpected move on Thursday morning with the shares of Vulcan Materials, which are trading off despite the top- and bottom-line beats posted for the September quarter.

We are making this move given two developments:

First, the company’s implied adjusted EBITDA guidance for the current quarter suggests the dramatic year-over-year improvement is slowing as it laps robust pricing levels for its products. Vulcan targets December quarter adjusted EBITDA of $0.55 billion to $0.65 billion compared to $0.55 billion in the December quarter. That flat to modest year-over-year improvement compares to the near 20% improvement logged during the first nine months of 2025.

Second, pricing has been a strong part of the Vulcan profit driver, but the lack of incremental pricing power on a sequential basis is being met with a downward inflection in cash gross profit per ton. That metric came in at $11.84 in the September quarter, down from $11.88 in the June quarter, suggesting the company has hit peak cash gross profit levels. As we head into the seasonally weakest time of the year for the company’s business, it means there is a risk of less fixed cost absorption.

Odds are that those factors are going to weigh on consensus earnings expectations and are likely to trigger at least some modest price target cuts. Normally, we would downgrade VMC shares to a Three rating, but as we’ve seen so far this earnings season, that likely means more downside for VMC shares in the coming days. We’d rather cut bait and preserve the gains we have.

With that in mind, by exiting the shares on Thursday, even after the morning’s move lower, we will still preserve a more than 60% gain for the Portfolio and re-arm our cash levels in the process. That will allow us to wade into companies with more favorable return prospects by tapping our shopping list in the coming days.

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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)