ORN - Orion Group: The Opportunity Pipeline Has Increased Due To Infrastructure Demands
2024-07-15 13:50:11 ET
Summary
- Orion Group Holdings is benefiting from industry trends and strong demand, with a market cap of $316M and a stock price increase of over 200% in the past year.
- ORN's Q1 report showed positive results, with strong momentum, a solid backlog, and improving profitability, leading to a Buy rating.
- ORN's management team, industry tailwinds, and upcoming projects indicate continued earnings growth and potential for stock price appreciation in the future.
While doing some research on my recent analysis of a small cap growth stock, American Superconductor (AMSC), where I wrote about how their revenue growth is being fueled by demand in a variety of industries that they serve including data centers, I was reminded of several peer companies in the engineering and construction industry that are seeing incredible growth for similar reasons. Companies like Powell Industries ( POWL ) and Sterling Infrastructure, Inc. ( STRL ) are indirectly benefiting from the AI trend and what I see as the emergence of Industry 4.0 or the Fourth Industrial Revolution , which I first wrote about over a year ago: Powell Industries: A Growth Stock For The Fourth Industrial Revolution . I also recently upgraded my Buy rating on STRL in May of this year when I wrote (with apologies to Houston):
Orion Group: The Opportunity Pipeline Has Increased Due To Infrastructure DemandsThere is also the possibility that additional bad weather (e.g. flooding in Houston) could delay road and construction projects that STRL has been awarded causing further short-term pain. But even if those things do happen it will have only short-term impacts. I believe that STRL stock will be trading much higher a year from now. The Q1 report was even better than expected and the outlook for 2024 is wildly positive. STRL has momentum and is poised to continue higher.