This dredging company just announced a $48 million base contract award on the Big Bend Channel of the Port of Tampa Bay, from the United States Army Corps of Engineers. It is expected that the contract will lead to an additional $25 million in additional option work items by early-2019.
Great Lakes Dredge and Dock Corporation (GLDD)
From The National Investor
Great Lakes Dredge and Dock Corporation (GLDD) this past week did manage to vault above that $6.00/share mark I pointed out recently as long-time resistance. Chiefly, this was on the back of another announcement of a contract: this one, a $113 million base deal on the Jacksonville (FL) Harbor Construction Dredging Contract ‘B’ 47-Foot Project. Ancillary work approved there by the U.S. Army Corps of Engineers could take the total work north of $200 million.
The company has missed earnings expectations for several quarters in a row; though, as I commented recently, investors looking for value have forgiven it, looking ahead to a bigger overall rebound and more traction from cost-saving and related measures. At present, expectations of the few analysts who follow the company are for Great Lakes to net about 20 cents/share in 2019. So at 30+ times forward earnings, that doesn’t exactly make GLDD cheap. But if those numbers get upgraded and are bolstered by the company starting to beat estimates, that would justify even more upside room.
I suspect there will be more business coming, too, on the Carolinas’ coasts following the damage caused by Hurricane Florence recently.
Not that GLDD will now necessarily be off to the races in a big way; but this breakout justifies me going to an “Accumulate.”
Chris Temple, The National Investor, www.nationalinvestor.com, 224-308-2587, September 29, 2018