We’re watching CSR & Dulux this week

It’s a big week — not only is Treasurer Wayne Swan handing down the budget on Tuesday night, but investors will also get a look at how the building materials sector is tracking.

First up this morning is DuluxGroup (ASX: DLX) which is scheduled to report its interim results. The leading paint manufacturer recent completed the takeover of Alesco. This acquisition has substantially broadened Dulux’s exposure to the new home and renovation market through exposure to Alesco’s operating divisions of garage doors, construction products, cabinets, windows, and kitchen appliances.

Then on Wednesday, building materials and glass manufacturer CSR (ASX: CSR) will hold its full-year results webcast at 10 am. The results come hot on the heels of Boral’s (ASX: BLD) earnings downgrade. CSR’s disastrous glass acquisition continues to lose money for the group, so all eyes will be on what management has to say about this division.

A comparison of these three companies with the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) shows that Dulux has significantly outperformed the index, CSR, and Boral over the past 12 months. One factor that could be at play here is the “habit” of spin-offs to outperform. Dulux demergered from Orica (ASX: ORI) in mid-2010 and since mid-2011 its share price has not only produced a stellar result compared to the index but it has also outperformed Orica’s share price by around 80%.


Source: Google Finance

Foolish takeaway

With the market continuing to push higher, company valuations are more and more priced for perfection. This sets companies up for a fall is they fail to deliver. As we have seen in recent weeks, earnings downgrades have led to sharp, company-specific sell-offs.

Prefer to build your portfolio with high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool’s purpose is to help the world invest, better.  Click here now  for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Tim McArthur owns shares in CSR .

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!