Growth on Focus: Sterling Construction Co. Inc. (STRL)

Company Profile:

Sterling Construction Company, Inc. operates as a heavy civil construction company in Texas, Utah, Nevada, Arizona, California, Hawaii, and other states of the United States. The company builds, repairs, and reconstructs transportation infrastructure projects that comprise highways, roads, bridges, and light rail; and water infrastructure projects, which include water, wastewater, and storm drainage systems. It primarily serves county and municipal public works departments, regional transit and water authorities, port authorities, school districts, municipal utility districts, and airport authorities. The company was formerly known as Oakhurst Company, Inc. and changed its name to Sterling Construction Company, Inc. in November 2001. Sterling Construction Company, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.

Recent News:

Sterling Construction Company Inc (NASDAQ:STRL) is next slated to report quarterly results on 2015-11-09 where the Street is anticipating earnings per share of $0.07. Most recently the firm reported earnings of $-0.12 for the period ending on 2015-06-30.

Management believes that the comparison of second quarter 2015 results to the second quarter of 2014 are less meaningful than the comparison of second quarter 2015 results to the first quarter of 2015, which better demonstrates current operating trends.

For the second quarter 2015, gross margin for projects awarded in 2015 has increased to an average of approximately 8%.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

STRL’s strengths can be seen in its strong growth, better solvency and better efficiency. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator. RSI is increasing to the bull territory, which stands at 56.10. The current P/BV ratio indicates it is undervalued compared to the average P/BV ratio of the industry and the sector. We rate Sterling Construction Co. Inc. (STRL) a STRONG BUY.