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Sterling Construction Awarded $20 Million Wastewater Project


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Sterling Construction Co. Inc.’s (STRL - Snapshot Report) affiliate, Myers & Sons Construction has been awarded a contract worth $20 million for the design and construction of a major wastewater recycling system for the Del Puerto Water District (DPWD). Myers & Sons Construction, was selected as part of a joint venture (JV) with Steve P. Rados, Inc by the City of Modesto, CA for the project whose total worth is around $40 million.

The range of work for the JV construction management/general contractor team (CM/GC) is to design and construct 11 specific project elements. Construction is scheduled to begin in late 2016. On completion, which is estimated around Dec 2017, the project will help transport up to 35,000 acre feet per year of recycled water directly to the Delta-Mendota Canal. The water will then be distributed to DPWD customers or stored within Reclamation's Central Valley Project (CVP) system during low water demand periods.

This is a significant project win for Sterling Construction as it is a very important and innovative venture which will represent the future of water supply management programs. The project will address two critical objectives by solving water supply shortages within DPWD’s service area and enable the city of Modesto to permanently discontinue its practice of discharging treated effluent into the San Joaquin River.



The company’s growing experience in the development of water infrastructure projects positions it well to participate in similar projects in the future as water shortages become more acute in the U.S.

At second-quarter end, Sterling Construction’s backlog was $810 million compared with $243 million at the end of second-quarter 2015. The company anticipates the trend to persist throughout the balance of this year and beyond.

Sterling Construction continues to see greater sequential investment in infrastructure projects at the federal, state, and local levels. Many of the projects that will be out for bid include roads, bridges, airports, and water projects in the $20 million to $80 million range, which fits in very well with its capabilities.

In line with expectations, since its earnings release in August, the company has won new contracts that position the company well to continue to add attractive and profitable opportunities to its backlog. One contract was around $21.5 million from the Colorado Department of Transportation (CDOT) to reconstruct the Crossroads Bridge on I-25 in Larimer County, CO while the other was a contract worth $21.7 million for a wastewater treatment facility project in Malibu, California.

Sterling Construction currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks in the sector include MasTec, Inc. (MTZ - Analyst Report) which sports a Zacks Rank #1 (Strong Buy) and has seen its estimates for fiscal 2016 go up 12% over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

EMCOR Group Inc. (EME - Analyst Report) carries a Zacks Rank #2 (Buy) and its estimates have gone up 7% over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Another Zacks Rank #2 stock is Gibraltar Industries, Inc. (ROCK - Analyst Report) , whose estimates have moved north 4% over the past 60 days

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