Buzzi - Introducing Italian Concrete Company At A 'Hold'

2025-03-27 11:51:55 ET

Summary

• Buzzi SpA is a leading cement and concrete company with a strong asset base and low leverage, but its current valuation is too high.
• Despite excellent fundamentals and a history of attractive free cash flow, Buzzi's recent surge in valuation makes it unattractive for investment now.
• The company has a conservative PT of €38/share, as I don't see a clear path to 15% annualized returns.
• Buzzi fulfills quality indicators but fails on valuation metrics, leading to a "Hold" rating due to the company's overvaluation.

In this article, I'll introduce you to the Italian company Buzzi SpA ( BZZUY ). This comes not as something that I own or am currently invested in but as something that is on my list alongside other companies like concrete companies Heidelberg Materials ( HDLMY ) and Holcim ( HCMLY ), which I have successfully invested in over the past few years.

Buzzi was the company I elected to "not go for" when the concrete producers were cheap. Depending on when you elected to invest, this has turned out to potentially be a bad choice - meaning that the company has been doing quite excellently. Maybe not as good as the former, but still very impressive, especially over the last three months....

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