Liontrust UK Opportunities Fund on CRH plc
Thesis
Liontrust continues to favour CRH despite a share-price decline driven by worries about US infrastructure and housing end-markets. The managers expect high-single-digit earnings growth over the medium term. They also see scope for the group to execute its acquisitions strategy. Their valuation argument is that CRH trades at a discount to US peers which they regard as unjustified.
“The stock continues to trade at what we consider an unjustified discount to its US peers.”
Key risks
- Weaker US infrastructure spending could reduce construction-material demand.
- A softer US residential market could weigh on end-market growth.