STRL - Sterling Infrastructure: A Quality Business But Don't Get Too Greedy Now
2024-06-05 16:20:13 ET
Summary
- Sterling Infrastructure has generated exceptional alpha over the past year, outperforming its small-cap peers as well as the S&P500 by 5-9x.
- STRL offers diversified access across the infra-services spectrum, but we are most enthused about its prospects in the high-margin data center construction space.
- STRL maintains a strong balance sheet and is well placed to use some of its excess cash which now accounts for the largest chunk of total assets.
- For the degree of medium-term EBITDA growth on offer, the stock looks very expensive, and the charts also suggest a fresh long position now wouldn't be too rewarding.
Introduction
The stock of Sterling Infrastructure, Inc. ( STRL ), a small-cap proxy on diversified infrastructure services in the US has proven to be a stellar source of alpha generation in recent periods. Over the past year, whilst its peers have generated returns within the mid-teens threshold, and the prime benchmark has generated returns of 25%, our focus stock STRL has surged by a whopping ~129%!...
Sterling Infrastructure: A Quality Business, But Don't Get Too Greedy Now