Leon Cooperman's Omega Advisors bought 880k Amrize shares in Q2. The cement maker's volumes rose but margins fell 74 bps. RBC downgraded. Q4 pricing catch-up is key.
Billionaire Leon Cooperman added Amrize to his portfolio in the second quarter, even as he warned the market is acting like Pavlov's dogs. In a CNBC interview, Cooperman quoted Warren Buffett: investors learned that when the bell rings at 9:30 a.m., they get fed. Through this rally, they became convinced there is a God who wants them to get rich, he said.
Omega Advisors' second-quarter filing showed the fund bought 880,000 shares of Amrize (NYSE: AMRZ), a building materials company. The position was a new addition. The firm also picked up 11.38 million shares of GPGI, a diversified industrial company.
Amrize makes cement and aggregates, plus roofing materials for North American construction. Second-quarter cement volume grew 5% and aggregates volume grew 6.5%. Aggregates pricing rose 4% on a freight-adjusted basis. CEO Jan Jenisch pointed to rising demand from data centers and energy projects, along with infrastructure work. Management raised full-year revenue guidance.
The bear case centers on margins. RBC downgraded the stock to underperform and cut its price target to $48 from $60. The brokerage believes the company is selling more material without turning that into more profit. Second-quarter revenue rose 8.6% but adjusted EBITDA missed consensus. Margin fell 74 basis points to 28.2%. Oil-driven inflation hit freight, diesel, and raw material costs. RBC noted that peers CRH and Vulcan Materials both beat expectations and held their guidance steady, while Amrize missed profit expectations and lowered its EBITDA outlook.
AlphaScala gives Amrize a Mixed rating with a score of 47 out of 100. The stock page is here. Vulcan Materials, a peer mentioned in the RBC note, has its own profile.
Management expects pricing to finally catch up with costs in the fourth quarter. A pickup in commercial roofing demand linked with commercial construction activity could help, the company said. Any easing in oil prices would lower freight costs, a positive for the company. Omega Advisors held 880,000 shares as of June 30.
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