James Hardie (JHX)
Hey guys, If you weren't in JHX do you think you'd be nibbling with this sell off? What are you planning on doing with your holding? Cheers Josh
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Answer
Hi Josh,
This is arguably the million-dollar question of this volatile reporting season. The weak US construction industry has weighed heavily on James Hardie (JHX) and Reece (REH) sending both stocks to fresh 2-year lows, not good in a bull market knocking on the door of all-time highs. However, the picture being painted by JHX and REH is far bleaker than their US peers which are off their 2024 highs, but have rallied to new 2025 highs in recent weeks.
Moving forward it’s important to remember that this is a cyclical industry and when the needle does turn both of these stocks are likely to bounce hard BUT we must ask – has the nadir yet been tested and can the anticipated Fed rate cuts over the next 12-months re-awaken the industry from its slumber?
At this stage we are reticent to sell our JHX position, although we are not married to it either. We don’t plan to average (buy more at lower levels to reduce our cost per share) after they’ve hit investors with the unpopular AZEK takeover and ~24% downgrade to FY26 EBITDA, a painful one-two. If in theory we had no position we might consider slowly establishing a position below $30, but we would be in no hurry.
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James Hardie (JHX) v S&P 500 Homebuilders Index
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James Hardie (JHX) v S&P 500 Homebuilders Index
