Our first idea is an infrastructure play that just walloped earnings estimates. Our second recommendation is a sale of a previous idea.
Buy: MYR Group Inc. (MYRG)
From Upside
MYR Group Inc. was upgraded to Best Buy, reflecting its robust operating momentum and modest valuation. Scheduled to post September-quarter results on Oct. 28—a day after Upside went to press—MYR was expected to report per-share profits of $0.78, up 26%. Nancy’s Note: The company actually earned $1.02 per share, on revenues of $607.90 million.
The company has topped profit estimates in four consecutive quarters, by an average of 32%. Full-year earnings per share are projected to jump 30% to $2.93.
A leader in the electrical construction industry, MYR serves utilities, independent power producers, and industrial and transmission companies. Engineering and construction stocks have rallied in recent months, partly because a strong Democratic showing in the election could translate to a substantial infrastructure bill that is expected to include spending on highways, green energy, and broadband.
Up 35% over the past three months, MYR remains cheap, sporting a Value score of 82 and an implied value of $61 based on 10-year average price/sales. The stock is a Best Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, November 2020