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Bull Of The Day: North America Construction (NOA)

Zacks

North American Construction (NOA) is the Bull of the Day following a strong 12% move higher the previous day. The stock is a Zacks Rank #1 (Strong Buy) and sports a value and growth style scores of A. Normally, I like to see a strong growth score and a weaker value score which tells me that this is a stock for growth investors.

Description

North American Construction provides heavy construction and mining services. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was founded in 1953 and is based in Acheson, Canada.

Earnings History


NOA has a good earnings history as they have beaten the Zacks Consensus Estimate in three of the last four quarters. The most recent beat was the one that got this stock on my radar screen. The company posted a breakeven quarter when the Zacks Consensus Estimate was looking for a loss of 12 cents. That is a big shift, and just what we like to see.

Earnings Estimates

There has been some strong positive momentum in earnings estimates. The Zacks Consensus Estimate for this quarter has moved from a loss of 3 cents to a gain of 1 cent over the last 60 days.

The next quarter has moved from $0.08 to $0.12 over the same time period.

The biggest move comes for the 2018 calendar year. The Zacks Consensus Estimate was at $0.25 just 60 days ago, now it is at $0.46.

The 2019 Zacks Consensus Estimate also moved higher over the same time horizon. The estimate was calling for $0.50 60 days ago, now that number is up to $0.57.

Valuation

I like the valuation here for NOA, with the stock trading at 17x forward earnings estimates and 23x trailing numbers. The price to book of 1.8x certainly makes the value players happy and the 0.72x sales number has plenty of room for growth.

Over the last there quarters, I see net margin improving from 1.82% to 2.44% to 3.90%. Add that margin improvement to the 74% topline growth number and you really have something.

Chart

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