Basics have attraction for some

NEW YORK – Cement. Railroads. Trucking. Steel. These aren’t sexy businesses, but they have something that adds to their appeal in the current investing climate: pricing power.

Unloved for years, old economy industries have piqued the interest of value-minded investors who say there’s a growing need for the goods and services they provide.

Asia’s humming economic growth is the most obvious factor, but there’s another point in their favor – their own troubled pasts. Hard times have left only a few survivors in these deeply cyclical industries, so there’s not a lot of competition as business heats up. But there’s not much buzz about their future, either.

“If you were to get 1,000 investors together today and say, ‘How many of you would like to hear about Burlington Northern Santa Fe?’ you wouldn’t have many takers, because the image of the railroad industry is based on what it used to be,” said Don Hodges, president of Hodges Capital Management Inc. in Dallas. Wall Street hasn’t hurried to paste “buy” ratings on these stocks, in part because many analysts believe rising demand for basic materials, pricing power commanded by railways and tightness in the trucking industry are temporary conditions. Some also think the stocks are already overvalued – a point Hodges and others dispute. But given the pace of global growth, economists say business is likely to be strong for a while.