In 2021, this particular activity accounted for 55% of the company's revenue. The first of these is referred to as capital work. The work that the company performs in the US is really centered around four primary types. By definition, dredging generally involves the enhancement or preservation of the navigability of waterways, or it involves the protection of shorelines, through the removal or replenishment of soil, sand, and rock. A unique firmĪccording to the management team at Great Lakes, the company serves as the largest provider of dredging services in the US. But if current conditions continue to decline, the company might warrant a downgrade moving forward. And as such, I have rated the company a 'hold', meaning that I think it will generate returns that, at best, will match the broader market. Absent some major change in the company's operations, I would make the case that while shares are cheap, they deserve to be cheap. Yes, shares of the company are trading at a cheap price, but recent financial performance has been even weaker than it was a year ago and backlog for the company continues to decline. After 2019, revenue for the company has been stuck in a fairly narrow range and profitability has been on the decline. One such firm, in my opinion, is Great Lakes Dredge & Dock Corporation ( NASDAQ: GLDD ). But some companies deserve to be trading on the cheap and, as a result, only give the illusion of upside potential. Buying into cheap companies is a great way to generate strong returns in the market.
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