Sterling Construction Hits 52-Week High On Pipeline Strength

STERLING CONSTR Price and Consensus

STERLING CONSTR Price and Consensus | STERLING CONSTR Quote

The company anticipates the bottom line to improve further. Sterling Construction continues to see greater sequential investment in infrastructure projects at the federal, state, and local levels. Many of the projects that will be out for bid include roads, bridges, airports, and water projects in the $20 million to $80 million range, which fits in very well with its capabilities.

Sterling Construction also completed an equity offering during the quarter which raised $19 million. The company used the proceeds to service a large portion of expensive debt and to fund working capital needs. Thus, the company is poised to grow on its stronger balance sheet and improved financial flexibility.

At second-quarter end, Sterling Construction’s backlog was $810 million compared with $243 million at the end of second-quarter 2015. Total backlog at the end of the second quarter, including projects where the company was the apparent low bidder but with the contracts yet to be signed, totaled $919 million, same as that at the end of first-quarter 2016. The company expects the trend to persist throughout the balance of this year and beyond.

In .line with expectations, since the earnings release the company has won new contracts that position the company well to continue to add attractive, profitable opportunities to its backlog. One contract was around $21.5 million from the Colorado Department of Transportation (CDOT) to reconstruct the Crossroads Bridge on I-25 in Larimer County, CO while the other was a contract worth $21.7 million from Myers & Sons Construction for a wastewater treatment facility project in Malibu, California.

Sterling Construction currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the sector include MasTec, Inc. (NYSE:MTZ) , EMCOR Group Inc. (NYSE:EME) and Gibraltar Industries, Inc. (NASDAQ:ROCK) . While MasTec sports a Zacks Rank #1 (Strong Buy), both EMCOR Group and Gibraltar Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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