New awards for $17 million in Concrete announced late last week. The Galveston work highlights the collaboration potential of the Concrete and Marine divisions working together. First award is $5.5 million from Hensel Phelps for concrete services for the new Royal Caribbean Cruise Terminal in the Port of Galveston. Paving and tilt-wall construction work should start shortly with completion this year. Second award is $6.5 million for construction of four tilt-wall buildings and associated paving in San Antonio that will begin in 3Q2021 with completion this year. Third award is $5.1 million for construction of multiple tilt-wall buildings and site paving for a new business park NW of the DFW area. The work should begin in 3Q2021 and run into 2Q2022.Maintain 2021E EBITDA of $47.0 million, including asset sales of $1.6 million. Tough comps are ahead, but Marine results should pick up and Concrete has upside potential. 1Q2021 backlog of $365 million dropped for both Marine and Concrete, but low bids pending award of $134 million increased $38 million so potential backlog remains high at $499 million. Recent awards appear to be incremental to potential backlog and industry fundamentals remain positive, with bids outstanding of close to $1.9 billion (~75% in Concrete).Asset sales set to close in 2Q/3Q2021 will increase financial flexibility. Absent acquisitions, a stock buyback program seems likely in 2H2021, if not sooner, since ~$28.7 million of idle/non-core assets could be monetized in 2Q/3Q2021. We believe that there is a strong preference for growth-oriented investments given that the potential impact on the small asset base. Absent acquisitions, a dividend and/or stock buyback seem possible.Maintain Outperform and price target of $8.25/share. We believe that the current stock price doesn't fairly reflect improved execution and higher profitability triggered by the ISG restructuring. Strong 2020 operating performance set the bar high and 2021 comps are challenging, but improved profitability, lower financial leverage and attractive valuation of 4.6x 2021E EBITDA supports our view that the risk/reward profile remains compelling. Potential catalysts include added awards, 2Q2021 operating results, infrastructure legislation and closing asset sales (Tampa in 2Q2021 and Port Lavaca in 3Q2021). Read More >>