ROAD - Construction Partners: No Longer A Road To Riches

2024-05-03 07:28:34 ET

Summary

• Construction Partners has outperformed expectations with a 62.5% increase in shares since August 2023.
• The company has seen strong revenue, profit, and cash flow growth, but shares may be reaching fair value or becoming overvalued.
• Despite continued growth prospects, I downgraded the company to a 'hold' due to valuation concerns.

Of the companies I have rated a 'buy' or 'strong buy' in the past several months, one of the best performers has been a company that you might least expect. That happens to be Construction Partners ( ROAD ), a firm that's specialized when it comes to the construction and maintenance of roadways. But of course, you could probably tell that from its ticker symbol. Anyways, back in August of last year, I came across the company for the first time. I found its business model to be interesting and shares to be cheap. Financial performance leading up to that point had also been rather impressive. All combined, this led me to rate the company a 'buy' to reflect my view that the stock would likely outperform the broader market moving forward....

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