Core Insights - Madison Small Cap Fund experienced a challenging third quarter in 2025, with a decline of 1.3% in its performance, significantly underperforming benchmarks due to stock selection and a speculative market environment [1] Company Analysis: Eagle Materials Inc. (NYSE:EXP) - Eagle Materials Inc. is identified as a leading U.S. manufacturer of heavy construction materials and light building materials, with a one-month return of -13.13% and a 52-week loss of 35.57% [2][3] - The stock closed at $202.52 on November 20, 2025, with a market capitalization of $6.572 billion [2] - The company is viewed favorably due to its strong financial traits, including high margins, return on invested capital (ROIC), and return on equity (ROE) [3] - Despite a prolonged downturn in the residential construction cycle, Eagle Materials has gained market share due to its geographical footprint and cost-competitive wallboard assets [3] - The current intrinsic value estimate for Eagle Materials is calculated at $269 per share, based on conservative assumptions regarding margin expansion and share buybacks [3]

Company Overview - Martin Marietta Materials, Inc. (MLM) has a market cap of approximately $36 billion and is a leading provider of natural resource-based building materials, including aggregates, cement, concrete, asphalt, and paving services, both in the U.S. and internationally [1] Stock Performance - Over the past 52 weeks, MLM shares have risen by over 2%, underperforming the S&P 500 Index, which gained 10.5%. However, on a year-to-date basis, MLM shares increased by 15.6%, surpassing the S&P 500's 11.2% return [2] - Compared to the Materials Select Sector SPDR Fund (XLB), which saw an 8.6% dip over the past 52 weeks, MLM shares have outperformed [3] Financial Performance - In Q3 2025, Martin Marietta reported adjusted EPS of $5.97 and revenue of $1.85 billion, which were weaker than expected. Despite this, shares rose nearly 1% on November 4. The company raised its full-year adjusted EBITDA forecast to a midpoint of $2.32 billion and reported an 8% increase in aggregates shipments, indicating strong demand and pricing supported by infrastructure spending and data-center-driven construction activity [4] Earnings Expectations - For the fiscal year ending December 2025, analysts project a 44.1% year-over-year decline in adjusted EPS to $18.11. The company's earnings surprise history is mixed, with two beats and two misses in the last four quarters. Among 21 analysts covering the stock, the consensus rating is a "Moderate Buy," consisting of 12 "Strong Buy" ratings, one "Moderate Buy," and eight "Holds" [5] Analyst Ratings - Stifel analyst Brian Brophy raised the price target for Martin Marietta to $681 while maintaining a "Buy" rating. The mean price target of $672.79 suggests a 12.7% premium to current price levels, while the highest price target of $754 indicates a potential upside of 26.3% [6]

Core Viewpoint - James Hardie Industries plc is facing significant legal and financial challenges following a sharp decline in its stock price and allegations of securities fraud related to misleading statements about inventory levels and customer demand in its North American segment [2][8]. Company Developments - The company announced the departure of its CFO, Rachel Wilson, and appointed Ryan Lada as her replacement on November 17, 2025 [1]. - The stock price collapsed by 34% on August 20, 2025, following the disclosure of poor performance in the North America Fiber Cement division [2][8]. Legal Issues - A class-action lawsuit has been filed against James Hardie and certain executives, alleging securities fraud for misleading investors about inventory levels and customer demand during the class period from May 20, 2025, to August 18, 2025 [4][5]. - The lawsuit seeks damages for violations of the Securities Exchange Act of 1934, specifically Sections 10(b) and 20(a) [4]. Financial Performance - The North America Fiber Cement segment, which generates approximately 80% of the company's total earnings, has been at the center of the allegations [5]. - The company reported a 12% decline in sales for this segment, attributing it to inventory destocking that management had previously denied [7]. Market Reaction - Following the disclosure of the sales decline, the market reacted negatively, resulting in a significant drop in the company's stock price [8]. - The plaintiffs argue that the stock price decline and subsequent investor losses were directly linked to the alleged wrongful acts and omissions by the company's management [8].

Core Viewpoint - Trex Company, Inc. has potentially violated federal securities laws, leading to an investigation by the Law Offices of Howard G. Smith on behalf of its investors [1]. Financial Performance - On November 4, 2025, Trex reported its third quarter 2025 financial results, which included a 12% decline in net income per share, missing consensus estimates [3]. - The company anticipates a "muted" fourth quarter, expecting channel partners to reduce their inventories for the remainder of the year [3]. Stock Market Reaction - Following the release of the disappointing financial results, Trex's stock price dropped by $14.61, or 31.1%, closing at $32.43 per share on November 5, 2025, resulting in significant losses for investors [3].

Company Overview - Trex Company serves residential homeowners, commercial property developers, and institutional clients in the United States, operating in both residential and commercial construction segments [1] - The company generates revenue primarily through manufacturing and distributing outdoor building materials to wholesale distributors, retail lumber dealers, and major home improvement retailers [1][6] - Trex offers a range of composite decking, railing, fencing, and outdoor living products, including branded systems such as Trex Transcend, Trex Select, and Trex Enhance [2] Recent Developments - On November 14, 2025, Gandhi Prithvi, the Chief Financial Officer of Trex, acquired 15,000 shares worth nearly $480,000, marking a significant investment during a period of stock price decline [6][9] - Trex shares have experienced a decline of 54.16% over the twelve months leading up to November 14, 2025, and are down 55% year to date [3][6] - The acquisition price was $31.92 per share, closely aligned with the closing price of $31.77 on the same day [4] Ownership and Market Activity - Following the purchase, direct holdings increased to 30,664 shares, representing approximately $974,195.28 in market value, which is 0.03% of outstanding shares, indicating a doubled stake compared to pre-transaction levels [4] - This purchase is noted as the largest reported transaction by Gandhi Prithvi, with no prior open-market buys or sells of this magnitude [5] Market Context - The housing industry is currently facing challenges due to high interest rates and a mismatch between housing supply and demand, contributing to a struggling market [9] - Trex's disappointing third-quarter results led to a significant drop in share prices, reaching a five-year low, which Mr. Gandhi capitalized on to increase his stock ownership [9][10] - The company has shown confidence in its future by announcing a $50 million share repurchase program [10]

Core Viewpoint - A class action lawsuit has been filed against James Hardie Industries plc and certain senior executives for securities fraud following a significant stock drop due to potential violations of federal securities laws [1][3]. Company Overview - James Hardie is a producer and marketer of high-performance fiber cement building solutions, primarily used in external siding for the residential building industry in the U.S. and Canada [4]. Allegations of Fraud - The lawsuit claims that James Hardie misled investors by stating that its North American fiber cement segment showed "inherent strength" and "underlying momentum," while in reality, sales were inflated due to inventory loading by channel partners, indicating fraudulent channel stuffing rather than genuine customer demand [5]. Stock Performance and Impact - On August 19, 2025, James Hardie disclosed a 12% decline in North American fiber cement sales, attributed to destocking efforts by customers. This revelation led to a stock price drop of $9.79 per share, or over 34%, from $28.43 to $18.64 within a day [6].

Simpson Manufacturing (NYSE:SSD) FY Conference November 18, 2025 11:00 AM ET Company ParticipantsMike Olosky - CEOMatt Dunn - CFOConference Call ParticipantsNone - AnalystModeratorFeel like I'm at a debate.Mike OloskyThe Senator from.ModeratorYeah.Mike OloskyYeah, exactly.ModeratorAll right, thanks. We'll go ahead and get started. I'll try not to knock the microphone off in the floor this time. I'm Trey Grooms. I think I've met most of you guys and gals, but I cover building materials, building products for ...

Core Viewpoint - A new securities class action lawsuit has been filed against CarMax, Inc., expanding the class period to include investors who acquired CarMax securities between June 20, 2025, and November 5, 2025, following significant market reactions to the company's leadership changes and financial disclosures [1][2][3]. Group 1: Class Action Details - The expanded class period now includes investors affected by the announcement of CEO Bill Nash's termination, which led to a share price drop of $9.48, or 23%, on November 6, 2025 [2]. - The lawsuit focuses on allegations that CarMax misled investors regarding its business model and growth prospects, particularly in light of its Q1 2026 earnings claims [3][4]. Group 2: Financial Performance - On June 20, 2025, CarMax reported a double-digit EPS growth for Q1 2026, claiming a strong market position, but the lawsuit alleges this was misleading as it did not account for consumers pulling forward purchases to avoid tariffs [4]. - CarMax's Q2 2026 results revealed a 24% year-over-year decline in net EPS, a 5.4% drop in retail used unit sales, and a 6.3% decrease in comparable store used unit sales [5]. - Concerns were raised about the quality of CarMax's Auto Finance loan portfolio, with an 11.02% revenue decline attributed to a $142 million loan loss provision, marking a nearly 40% sequential increase and a 24% year-over-year rise [6]. Group 3: Market Reaction and Analyst Commentary - Following the CEO's termination, analysts expressed concerns that the situation indicated deeper issues within CarMax, shifting perceptions from a value play to a potential "falling knife" scenario [7].

Financial Data and Key Metrics Changes - Total net sales grew 34% to $1.3 billion, including $345 million from acquired AZEK sales, while organic sales declined 1% [22] - Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin [22] - Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26 [22] Business Line Data and Key Metrics Changes - Siding and trim segment net sales increased 10%, including $89 million from AZEK, while organic net sales declined 3% due to lower volumes [23][24] - Deck rail and accessories net sales increased 6% on a pro forma basis, with adjusted EBITDA of $79 million and a 30.7% adjusted EBITDA margin [25] - Australia and New Zealand net sales declined 10% due to a 20% decline in volumes, partially offset by a 14% rise in average selling price [26] - Europe net sales increased 18%, driven by strong fiber gypsum volume and consistent average net sales price [27] Market Data and Key Metrics Changes - North America accounts for 80% of net sales, with siding and trim and deck rail and accessories being the largest segments [9] - New construction represents approximately 40% of North America revenue, with repair and remodel at about 60% [10] - Demand trends in the new home market have improved relative to expectations, with mid-single-digit organic net sales declines anticipated for the full year [10] Company Strategy and Development Direction - The company focuses on profitable growth, disciplined execution, and material conversion from wood and inferior materials to composite alternatives and fiber cement [7] - The integration with AZEK is on track, with a focus on cost synergies and enhancing marketing capabilities [18][19] - The company aims to drive material conversion and sharpen execution across the business while delivering on synergy and deleveraging commitments [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, leading to a modest increase in full-year guidance despite ongoing challenges [8] - The company expects continued challenges in siding and trim markets, with mid-single-digit organic sales declines anticipated in the second half [28] - Management remains optimistic about long-term cash generation and expects to generate at least $200 million in free cash flow for the year [30] Other Important Information - The appointment of Nigel Steen as Chair of the Board and Ryan Lotta as the new Chief Financial Officer was announced [4][6] - The company has surpassed its first-year cost synergy goal and is pushing towards a total cost synergy target of $125 million [19] Q&A Session Summary Question: Trends in siding and trim, particularly with builder customers in the South - Management noted that the deterioration in market conditions has been less severe than previously anticipated, with some regions showing more stable activity [36][39] Question: Competitive environment in decking and railing - Management indicated that they have not seen a need to change their strategy and continue to focus on customer value and downstream marketing [42][46] Question: Price expectations in decking - Management confirmed that they will remain consistent in their pricing actions and continue to take inflationary pricing in the marketplace [52] Question: Cost synergies and timing - Management highlighted that they have achieved 85% of their G&A cost synergy target and are focused on ensuring no disruption to the base business [78] Question: Trim attachment rates in new housing and R&R - Management reported progress in trim attachment rates, particularly with large home builders, and sees significant opportunities for growth [68]

Financial Data and Key Metrics Changes - Total net sales grew 34% to $1.3 billion, including $345 million from acquired AZEK sales, while organic sales declined 1% [22] - Adjusted EBITDA was $330 million, with a 25.5% adjusted EBITDA margin [22] - Adjusted net income was $154 million, and adjusted diluted earnings per share was $0.26 [23] Business Line Data and Key Metrics Changes - In the Siding and Trim segment, net sales increased 10%, including $89 million from AZEK, while organic net sales declined 3% due to lower volumes [23][24] - Deck Rail and Accessories saw net sales increase by 6% on a pro forma basis, with adjusted EBITDA of $79 million and a 30.7% adjusted EBITDA margin [25] - Australia and New Zealand net sales declined 10% due to a 20% decline in volumes, partially offset by a 14% rise in average selling price [26] - Europe experienced an 18% increase in net sales, driven by strong Fiber Gypsum volume and average net sales price [27] Market Data and Key Metrics Changes - North America accounted for 80% of net sales, with new construction representing approximately 40% of revenue and Repair and Remodel at 60% [9][10] - The company expects mid-single-digit organic net sales declines for the full year, with challenges in the Siding and Trim segment [10][28] Company Strategy and Development Direction - The company is focused on profitable growth, disciplined execution, and material conversion from wood and inferior materials to composite alternatives and Fiber Cement [7] - The integration with AZEK is on track, with a focus on cost synergies and expanding market reach [18][19] - The company aims to drive material conversion and sharpen execution across the business [30] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, leading to a modest increase in full-year guidance despite ongoing challenges [8] - The company is optimistic about long-term cash generation and expects to generate at least $200 million in free cash flow for the year [30] - Management emphasized the importance of contractor conversion and the potential for growth in the Repair and Remodel market [12][66] Other Important Information - The company appointed Nigel Steen as Chair of the Board and Ryan Lada as the new Chief Financial Officer [4][6] - The company has surpassed its first-year cost synergy goal and is targeting $125 million in total cost synergies [19] Q&A Session Summary Question: Trends in Siding and Trim, particularly with builder customers in the South - Management noted that the deterioration in market conditions has been less severe than previously expected, with some regions showing more stability [36][39] Question: Competitive environment in decking and railing - Management indicated that they have not seen a need to change their strategy and continue to focus on customer value [42][46] Question: Pricing expectations in decking - Management confirmed that they will continue to take inflationary pricing in the marketplace and do not foresee changes [52] Question: Future plans for railing product introductions - Management highlighted the recent launch of Advantage Rail and the strategy to provide a complete portfolio to dealer partners [55][58] Question: Organic strategy and challenges in the Northeast - Management identified the need to decrease the price differential versus inferior substrates as a key opportunity for growth [63][66] Question: Cost synergies and timing - Management reported that they have achieved significant G&A cost synergies and are focused on ensuring no disruption to the base business [77][78]