Sell U.S. Concrete (NSDQ: USCR) on CFO Departure

By Linda McDonough • March 24, 2017

Sell U.S. Concrete (NSDQ: USCR)

U.S. Concrete is falling hard today on news of its CFO departure AND a change in auditors. This is highly unusual and despite the company saying the changes are not related to each other, it seems unlikely. The previous auditors signed off on the company’s annual statements but my suspicion is there is disagreement over some accounting issue going forward.

It’s quite possible the stock rallies as it is seeing decent demand but the combination of a sudden CFO departure and a change in auditors is not a good sign.

We’re flat on the name so take your capital and I’ll find a better stock for us.

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Diamond Bob

03/25/17 ‐ 10:03am ET March 25, 2017 at 10:03am ET

Hi Linda, I’m out of my “us concrete” options trade with a small profit. Thank You! I have a question tho about two other stocks that I’ve been following. The first is AYI. I know you still rate it as a buy. I’ve been looking at the PUTS and there are some sizable premiums. What would you think of a PUT credit spread for May something like a 190/185 or even more aggressive? Also thinking of buying a WYNN PUT. Stock is up on take over rumors. But this stock swings wildly at times. Any thoughts there?
Thanks, Diamond Bob

Linda McDonough

03/27/17 ‐ 6:30am ET March 27, 2017 at 6:30am ET

Hi Diamond Bob,
AYI is acting like a dog. If you remember they missed last quarter’s earnings due to softness in small projects and the delay of one large one due to a delay in finding enough construction workers. Its February quarter will be announced on April 4. I’m going to go through its numbers one more time to make a decision before that event. It’s down 27.5% in the portfolio, a maximum pain point for me. The Architectural Building Index (ABI), which is a pretty good tracker for building demand, rebounded nicely in February so that is a good sign.
On WYNN, I have never really looked at it so unfortunately don’t have anything intelligent to add.
Best,
Linda

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Linda McDonough

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Linda McDonough is a veteran hedge fund analyst who loves to break down company financial statements and identify market inefficiencies to uncover big opportunities. She believes in a boots-on-the-ground approach that includes surveying customers, interviewing company executives, or doing whatever it takes to see what others don't.

She's now brought her experience as a hedge fund analyst to subscribers of her Profit Catalyst Alert service. Her system identifies small- and mid-cap stocks that are about to move due to catalytic events that few others can identify...until it's too late. These events often times result in massive gains for her followers.