IIIN - Insteel Seeing Strong Drivers But The Market Seems Concerned That Leading Indicators May Have Peaked
- Insteel has reported another two strong quarters, with better pricing and margins than I'd expected, and continues to accumulate cash at an appealing rate.
- The share price performance has been more mixed, with the market apparently concerned that leading indicators of non-residential activity peaked in May.
- While there has been a slowdown in the ABI and Dodge Momentum indices, the trend is still positive and the infrastructure bill could drive meaningful multiyear incremental demand.
- I can see near-term upside into the $40s, and Insteel will likely pay another good special dividend, but investor concerns over peaking indicators has to ease for the shares to outperform.
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Insteel Seeing Strong Drivers, But The Market Seems Concerned That Leading Indicators May Have Peaked