- Insteel has been enjoying robust demand from a surprisingly resilient construction sector in its core Southeastern footprint, driving impressive fixed cost leverage and incremental margins.
- A successful anti-dumping case in PC strand should restore meaningful pricing power and drive expanded gross margins in 2021.
- End-user demand in 2021 is a major unknown; non-resi activity is weakening, but still relatively better in Insteel's core regions; a federal infrastructure bill would be a major positive driver.
- I believe Insteel should trade further into the $30s in this cyclical run, and an infrastructure bill should put $40-and-above in play, but be careful of overstaying your welcome.
For further details see:
Insteel Should See Better Pricing, But End-User Demand Is A Real Question