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Bull of the Day: MYR Group (MYRG)

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MYR Group (MYRG - Free Report) is a Zacks Rank #1 (Strong Buy) and it has a clean slate of A’s for the Zacks Style Scores.  This stock is the Bull of the Day today after an impressive move on Friday.

Let's take a look at why this stock is moving so much and why it has the highest Zacks Rank.

Description

MYR Group Inc. is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the United States and Canada who have the experience and expertise to complete electrical installations of any type and size. Their comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services. Transmission and distribution customers include investor-owned utilities, cooperatives, private developers, government-funded utilities, independent power producers, independent transmission companies, industrial facility owners and other contractors. Commercial and industrial electrical contracting services are provided to general contractors, commercial and industrial facility owners, local governments and developers generally throughout the western and northeastern United States and western Canada.

Earnings History

I see a good earnings history with 3 beats and 1 miss in the last 4 quarters. 

The most recent beat had the company posting EPS of $0.76 when the Zacks Consensus Estimate was calling for $0.55. That $0.21 beat translates to a positive earnings surprise of 38%.

Over the last year the average positive earnings surprise is 7.4%.

Estimate Revisions

The estimate revisions for MYRG are just what we like to see.  A smooth trickle higher for this quarter, next quarter, this year and next year.

I see a bump of 3 cents for this quarter and a penny for next.

The 2020 Zacks Consensus Estimate is $2.72 but it was just $2.59 60 days ago.

Next year we are looking at $3.16 and that is up from $3.09 60 days ago.

Valuation

I love this valuation.  8.5x forward earnings is a steal.  28% topline growth is wonderful to see.  1x book is also a steal!  I don’t like that price to sales is 0.2x but that is a result of margins being so thin at 1.8%.

Chart

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