DA Davidson Highlights Texas Industries (TXI), Mueller Water (MWA) as Possible Takeover Candidates

May 31, 2012 3:58 PM EDT
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An analyst at DA Davidson issued a late-day note Thursday considering some takeover targets in the Construction Products sector following recent notable deals between Eaton and Cooper, Nucor and Skyline, and AZZ and Nuclear Logistics, to name a few.

The firm's Brent Thielman believes "as cash builds, market multiples experience pressure, sectors consolidate and industry particpants clamor for growth amidst a slow market recovery, we expect transactions will be on the menu..." Thielman noted Valmont (NYSE: VMI), Belden (NYSE: BDC), Hubbell (NYSE: HUB-A) and Acuity (NYSE: AYI) as having the liquidity to "participate in potentially meaningful accretive transactions." On the other side, the analyst said Texas Industries (NYSE: TXI) and Mueller Water (NYSE: MWA) are among companies "burning cash and/or with balance sheets that limit the ability to significantly invest..."

Thielman rates shares of Mueller a Buy and shares of Texas Industries a Neutral.

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