USLM

USLM is a textbook high-quality compounder hiding in a boring SIC code. Revenue has nearly doubled in four years ($189M FY2021 → $373M FY2025) while net income more than tripled ($37M → $134M), and FY2025 kept the streak going: revenue +17.3%, net income +23.4%, diluted EPS +23.2%. Critically, this isn't volume-only growth — gross margin sits at 48.9%, operating margin at 42.4% and net margin at 36.0%, with every profit line growing faster than revenue (gross +26.7%, operating +26.4%). That margin expansion reflects the pricing power of a regional lime producer: lime is heavy, low-value-per-ton and uneconomic to ship far, so each plant enjoys a natural geographic moat across construction, environmental (flue-gas/water treatment), metals and ag end-markets.

The balance sheet is pristine to the point of being a fortress: zero long-term debt, total liabilities of just $50.3M against $631M of equity (0.08x), and $371M of cash (up 33.5%) — roughly $12.9/share, or ~13% of the market cap. ROE of 21.3% is achieved with essentially no leverage, which means returns on operating capital are far higher still. Operating cash flow of $165M (+30.9%) comfortably funds the sharply elevated $62.7M capex (+128.7%), still leaving ~$100M of free cash flow that backstops the growing dividend ($6.87M, +20.2%) and buybacks. The capex surge is the key tell: management is plowing cash into the modernization/expansion projects the MD&A repeatedly references, planting the seeds for the next leg of capacity-driven growth.