Thursday, June 17, 2010

Homework: GLDD

On April 22, 2010, shit hit the fan. The Gulf has not been the same since. At the time, GLDD was just another little stock struggling to stay above that 5-dollar mark. But with 65 million barrels — or maybe they're all lying and it's more like 500 million barrels — of raw crude oil bringing toxins to the entire Gulf sooner rather than later, GLDD is taking on an unexpected role. 

Man-made barriers are part of the company's capabilities. Man's butchery of Mother Nature gives GLDD shareholders a chance to actually see a paper profit. The stock plummeted from 6.01 to 4.01 in a cataclysmic four-day span in late February. On April 22, GLDD closed at 5.56. It dropped to an intraday low of 5.02 on May 25, but the bulls have taken control since. GLDD now trades at 6.39 and is on the verge of breaking through prevailing resistance at 7.18.

The candlestick analysis reads that it's late to buy shares here, and I agree. Best to wait for profit-taking and a slight decline. But if GLDD keeps doing its thing, barring a miraculous cure to BP's unprecedented destruction of the Gulf, those man-made barriers will be in high demand.

Here's a PR release about GLDD signing on with the State of Louisiana to
build sand berms off its coast. 
Here's a report on GLDD's barrier work on the South Carolina coast.

Great Lakes Dredge & Dock Corp.

June 17 (closing): 6.39
Key Statistics
Profit margin: 3.22% 
Operating margin: 7.48%
Return on Assets: 4.2%
Return on Equity: 7.95%
Revenue: 604.44M
Quarterly Revenue Growth (yoy): -9.9%
Quarterly Earnings Growth (yoy): 27.50%
Total Cash: 20.92M
Total Debt: 170.06M
Shares Outstanding: 58.56M
Float: 54.14M
% held by Insiders: 6.9%
% held by Institutions: 84.2%
CEO: Douglas Mackle 1.09M
Candlestick analysis: "Sell If" due to Bearish (Doji) Star Pattern (American Bulls)
Summary: Fairly decent numbers. Even the debt isn't as daunting with the revenue stream at $604 million annually. The small float has made this a fast mover from lows (March 2009, March '10). Looks like some upside is still there, but it may be a week or two late to get a decent entry price. For a longer-term trade, it's a mystery to me. Man-made barriers and islands ... maybe I won't be surprised if and when GLDD is at 10 in a few months. 

GLDD 1-year chart (daily)

GLDD 5-day chart (15-minute bars) vs. BP

GLDD 1-day chart (1-minute bars) vs. BP

GLDD 3-year chart (weekly)

Photos: GLDD website

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