I'm skeptical of businesses that struggle (or fail) to earn their cost of capital over a sustained period of time. That makes Great Lakes Dredge & Dock (GLDD)
a more challenging company for me. On one hand, I like the company's
strong share in its core dredging operations, and I believe there will
be significant port expansion projects in the years to come. Yet, even
with over 100 years of experience, the company's wobbly cash flow,
returns on capital, and book value growth doesn't give me a lot of
confidence, and the company's quarterly reports have had a flair for the
dramatic lately.
These shares have rallied a third since their
lows of the fall, but I could see these shares heading higher as the
company logs more port, waterway, and beach work. I'd be careful to make
this relationship a casual one, though, and not expect to hold for long
stretches of time as the underlying performance just doesn't seem to
merit it.
Read more here:
Great Lakes Dredge And Dock Needs To Execute On Upcoming Opportunities
No comments:
Post a Comment