As a global leader in specialty chemicals used in construction, Sika (OTCPK:SXYAY) (SIK.S) is an invaluable bellwether for the state of global construction activity, and the company is most definitely seeing strong activity across its global footprint. Cost inflation is an issue, but it is one that management believes they have in hand and that will be relatively well-contained from this point on. Longer term, the company remains incomparably well-placed to leverage opportunities in greener construction on top of the ongoing trend in urbanization.
Sika shares are up modestly since my recent update, and the shares continue to remain quite pricey by conventional means. I’m not going to make an “ignore the valuation and just buy” call, but I will note that few companies in any industry have the long runway of global growth potential that Sika has, not to mention healthy margin leverage, so there is definitely a credible argument for scarcity value here on top of the above-average growth.
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