Orion Needs To Leverage Infrastructure Opportunities To Drive More Consistent Results

Consistent performance has been elusive for Orion Group (NYSE:ORN), even though the company has hard-to-match capabilities in marine construction and a solid concrete construction operation in Texas. To some extent, this is not all Orion's fault, as a lot of the company's business depends upon government budgeting and allocation decisions and the company is vulnerable to very competitive (if not irrational) bidding behavior from its rivals. While the shares have done quite well over the past year compared to other construction and dredging operators like Great Lakes Dredge & Dock (NASDAQ:GLDD) and Granite Construction (NYSE:GVA), the five-year performance record is not especially strong.

Orion looks undervalued, but that undervaluation comes with the underlying cost of a lot of risk and uncertainty. I expect a supportive funding environment for the maintenance of commercial waterways, as well as coastal restoration projects, and I think growth in the cruise sector and terminal demand will support the construction operations, while Texas remains a growth market for the concrete construction business. That said, winning and executing bids should not be taken for granted and this isn't a "widows and orphans" type of opportunity.

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Orion Needs To Leverage Infrastructure Opportunities To Drive More Consistent Results