The Big Picture

Construction stocks have had a strange couple of years. The ones with any tie to data centers, utilities, or energy infrastructure got bid up as investors chased the AI buildout, then sold off when the spending looked stretched and financing costs stayed high. The result is a sector where the good stories and the overpriced ones got separated quickly.

Michael Brush’s new letter, Cabot Insider Edge, leans into that split with its first teaser pitch. The promo is called “I Just Found the 3 Stocks Behind $11.3 Million in Insider Buying,” and one of the three names is Cardinal Infrastructure (CDNL), a Southeast construction-services rollup. It is the construction pick of the trio, and it sits right in the middle of this sector-wide repricing.

What Counts as a Construction Stock

The category is broader than most people realize. At one end are the residential builders, tied to housing starts and mortgage rates. In the middle are the commercial contractors, the ones putting up warehouses, retail space, and offices. At the other end are the heavy-civil and infrastructure specialists, the companies moving earth for roads, utilities, and, increasingly, data centers and power plants.

Cardinal sits closer to the residential and commercial middle. It is vertically integrated, which means it handles the full chain of work rather than subcontracting it out. The promo compares it to Sterling Infrastructure, a data-center builder, and to Construction Partners, a regional rollup that works the same part of the country. The comparison is loose, because Cardinal’s actual revenue mix tilts more toward housing development than toward data-center work.

The Insider Angle

The hook for the whole promo is insider buying, and the construction name is the biggest piece of it. Insiders bought about $8.1 million, and the actual total is more than $9 million. The headline item is a roughly $3 million purchase by the CEO against a $450,000 salary, which is a serious personal bet.

That kind of cluster buying, C-suite executives buying at market prices in meaningful size, shows up in the research as a modestly positive signal. The studies point to something like 3% to 5% of outperformance over the next six to twelve months. It is not a rocket, but it is enough to make a beaten-down name worth a second look.

The Selloff That Set It Up

Cardinal’s chart tells the story. The company went public in December 2025 at $21 a share, soared to a June high, then collapsed roughly 50%. Three things stacked up: the six-month lockup expired, a $320 million raise priced at $73 a share diluted early holders, and the August 11 quarter beat on revenue but missed on earnings and margins. The stock slid from the $90s into the $30s, closing near $36.98 on August 31.

That is the pattern across much of the construction trade in 2026: strong backlog and revenue, softer margins, and a market that decided to reprice growth that came with caveats. The promo’s numbers, earnings up 114%, backlog up 35%, and management guiding toward 95% revenue growth, are real. They just did not stop the slide.

The Dual-Class Wrinkle

Construction rollups often have founder-led structures, and Cardinal is no exception. The founder and family hold about 27.5 million non-traded Class B shares plus roughly 20 million trading Class A shares. Consolidated net income lands near $37 million, but only about $18 million is attributable to common shareholders.

That gap changes the math. The promo leans on an 18-times-forward-earnings multiple, cheaper than Sterling Infrastructure at around 20 times. But the multiple is built on the Class A economics, not the consolidated profit. For anyone weighing the company-specific details, the dual-class discount is the thing to watch before trusting the cheap-looking number.

How It Fits the Trade

The honest read is that Cardinal is a housing-development bet today, not a pure data-center builder, even though the promo borrows the data-center halo. That distinction matters for how you size the position and how much you trust the Sterling Infrastructure comparison. We covered the infrastructure side of the story and the data-center buildout separately, and the difference between those two trades is the whole ballgame here.

Construction stocks as a group have real tailwinds, spending on power, data centers, and reshoring is not slowing down. The catch is that not every construction stock is exposed to those tailwinds equally. Some are simply housing plays wearing an infrastructure label.

The Verdict

The construction category has winners and pretenders right now, and the line between them runs through what a company actually builds. Cardinal’s insider buying is real and sizable, but its economics are dual-class and its revenue is more residential than the data-center pitch suggests. That is a reason to dig, not a reason to buy blind.

Ready to see the research? Click here to access Michael Brush’s report.

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