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Construction Partners, Inc.

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ROAD trade ideas

Construction Partners (ROAD) Analysis Company Overview: Construction Partners NASDAQ:ROAD is strategically expanding its footprint in the southern U.S. through the acquisition of John G. Walton Construction Company, which enhances its market position in Mobile, Alabama. This acquisition not only adds valuable assets but also aligns with the company’s growth strategy, reinforcing its commitment to expanding its operational capabilities. Key Catalysts: Strategic Acquisition: The purchase of John G. Walton Construction is expected to create operational synergies and improve efficiencies, which could lead to enhanced profitability in a key market. Market Presence: This move strengthens ROAD's presence in a vital geographic area, positioning it to capture more market share as infrastructure spending continues to grow in the region. Institutional Confidence: The increased stakes from institutional investors like Dimensional Fund Advisors and Vanguard signal strong confidence in the company’s strategic direction and future growth potential. Investment Outlook: Bullish Outlook: We are bullish on ROAD above $58.00-$59.00, reflecting optimism about the company’s operational enhancements and market expansion. Upside Potential: The target for ROAD is set at $85.00-$86.00, driven by anticipated growth from recent strategic initiatives and strong market dynamics. 🔨 ROAD—Building a Stronger Future Through Strategic Growth. #Construction #MarketExpansion #StrategicAcquisition
NASDAQ:ROADLong
by Richtv_official
The Great Trump Infrastructure PlayIt has been postulated by people I trust and respect that the best next step for Donny J. Trump is to enact an aggressive FDR like infrastructure initiative to grow jobs and 'build America'. This theory has already been somewhat confirmed, as Trump literally that same day pissed off environmentalists with an aggressive move to expand infrastructure (www.axios.com) I'm incredibly reserved and hesitant to buy anything right now, but this is a macro theory that holds water (pun intended) and if the Fed does stop propping markets up, they won't stop propping up quality infrastructure-based stocks as they attempt to pull off a "Donny: The Great Builder" look before next November. These are the companies I've found with high p/e (ie. sought after, market willing to pay premium), that are outperforming or near to outperforming their sector, which is outperforming the market. This is hard, because US Infrastructure sector is essentially bleeding, down -35% compared to a market up 9%. -- ROAD Contruction Partners has a phenomenal balance sheet, trades at a healthy P/E of 23.5x (higher than sector and market), and is considered a whopping 43% *overvalued* by SimplyWallSt. This means the market is paying a handsome premium for whatever reason. The biggest caveat to ROAD, which meets all criteria to a 'T' by every other metric, is its technicals. ROAD became massively volatile starting December 2019, which was accentuated by COVID-19. The price has recovered like the market overall--a dramatic V that has taken out a significant resistance level. Still, the sharpness and number of declines since December prompt caution in buying at current levels. WTRG Essential Utilities deals in water/wastewater services. They continue to expand year over year. They trade far *above* SimplyWallSt fair value, but perhaps there is a reason the market pays this premium (P/E is 39.5x)? Their debt has spiked recently, but so has their equity. Perhaps they are aggresively expanding, to significant success, and can reign this debt in easily if desired. It's important to note WTRG has to date *not outperformed it's sector or the US Market*, which may be grounds to rule it out as part of this infrastructure play. MIC Trading "below" SimplyWallSt fair value, Macquarie Infrastructure has beaten its sector, but both are significantly negative for the year... which may be a positive if you're a buy low type. While they have significant debt, the market has justified trading them at near 60x P/E. The trend reversal isn't as strong/convincing here as with WTRG. AY Atlantica Sustainable Infrastructure is the best "sustainable" I could find that fits the criteria above. Gotta work that "sustainable" in. It is probably the future, like it or not. AY trades at "39.7% below" SimplyWallSt fair value, pays a high though seemingly unsustainable dividend, and an insane level of debt with slowly decreasing equity. Still,the market pays a premium of 92.2x earnings for this stock. Further research revealed that AY is majority owned by Algonquin Utlity Corp, and I ended up liking that stock a little more as it has a cleaner balance sheet (see below). It might be better to cut out the middle man and play a pure power utility that owns most of AY versus the pure sustainable infrastructure play. AQN Algonquin Power & Utlities is a smaller player in the space that operates in US and Canada. If both countries take on infrastructure initiative, could be a double whammy. Stock has performed well historically trending up for its lifetime until COVID-19 hit. Balance sheet is healthy, or debt and equity are balanced at the very least (a trend towards increased debt and decreasing equity bodes mildly worrisome). AQN owns AY, so this can be considered an alternative energy investment. It has outperformed it's sector (US Integrated Utilities) and the market overall, up 17.5% for the year as of writing this. Trading at "26.7% below" SimplyWallSt fair value. -- So these are my Great Trump Infrastructure Play ideas, based on how I was taught to screen companies to go long. I haven't made moves on any of these, and I'm not telling you to, either. Just tossing around ideas. What do y'all think? -ONI
NASDAQ:ROADLong
by onidraug