Core Insights - TimesSquare Capital Management's "U.S. Focus Growth Strategy" reported a gross return of 4.00% and a net return of 3.78% for Q3 2025, outperforming the Russell Midcap Growth Index's return of 2.78% [1] - EMCOR Group, Inc. (NYSE:EME) was highlighted as a key stock, with a one-month return of 2.00% and a 52-week gain of 28.71%, closing at $623.65 per share with a market capitalization of $27.918 billion [2][3] Company Performance - EMCOR Group, Inc. reported consolidated revenues of $4.3 billion in Q3 2025, marking a 16.4% increase from Q3 2024 [4] - The company's strong performance was driven by significant growth in its US Electrical segment, particularly due to data center expansion, which contributed to a 21% stock increase [3] Investment Positioning - EMCOR Group is well-positioned to capture a significant share of large data center and manufacturing projects, supported by its scale and advanced capabilities in virtual design and construction [3] - Despite its potential, EMCOR is not among the top 30 most popular stocks among hedge funds, with 58 hedge fund portfolios holding its stock at the end of Q3 2025, up from 51 in the previous quarter [4]

Core Insights - The Zacks Building Products - Heavy Construction industry is experiencing significant growth driven by a generational infrastructure push and increased federal spending on transportation, broadband, and clean energy initiatives [1][4] - Established companies like EMCOR Group, MasTec, and Dycom Industries are well-positioned to capitalize on this growth due to their technical expertise and disciplined project execution [2][5] Industry Overview - The industry encompasses mechanical and electrical construction, industrial and energy infrastructure, and building service providers, focusing on transportation projects and communications infrastructure [3] - The U.S. administration's infrastructure plan aims to create modern, sustainable infrastructure, which is expected to significantly impact the economy and construction industry over the next five years [4] Growth Drivers - The data center boom is increasing demand for large-scale site development and specialized mechanical systems, benefiting companies with technical expertise and national reach [5] - The ramp-up of 5G projects is driving demand for telecommunications infrastructure, with significant investments expected in network expansion [6] - Acquisitions are being used by companies to solidify their product portfolios, while the renewable energy sector is poised for growth due to increased project activity [7] Macroeconomic Environment - The industry faces challenges such as a tight labor market, rising raw material costs, and economic uncertainty, which could affect project economics and capital expenditure budgets [8] Industry Performance - The Zacks Building Products - Heavy Construction industry ranks 32, placing it in the top 13% of over 250 Zacks industries, indicating solid near-term prospects [9][10] - The industry's earnings estimates for 2025 have increased from $5.90 to $6.52 per share, reflecting growing analyst confidence [11] Stock Performance - The industry has outperformed the broader Zacks Construction sector and the S&P 500, with a collective gain of 51.5% over the past year compared to a 3.2% decline in the sector [13] - The industry's forward 12-month price-to-earnings ratio is currently at 23.47, slightly below the S&P 500's 23.55 [17] Company Highlights - **EMCOR Group**: Positioned for growth with a record backlog and strong demand from infrastructure and data center projects, with earnings expected to grow 17.1% in 2025 [20][21] - **MasTec**: Benefiting from robust demand across multiple segments, with a backlog increase of 23% year over year and expected EPS growth of 60% in 2025 [25][26] - **Dycom Industries**: Capitalizing on investments in broadband and digital infrastructure, with earnings estimates for fiscal 2026 increasing to $10.01 per share [28][29]