Granite Story

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GVA -- USA Stock  

USD 37.63  1.87  4.73%

As many millenniums are trying to avoid industrials space, it makes sense to go over Granite Construction a little further and try to understand its current market patterns. We will evaluate why we are still confident in anticipation of a recovery. Is the firm operations in 2021 sustainable? Here we are going to cover Granite Construction perspective on valuation to give you a better outlook on taking a position in this stock.
Published over two weeks ago
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Is Granite Construction (NYSE:GVA) ready for a correction?
The entity has 493.2 M in debt with debt to equity (D/E) ratio of 0.5, which is OK given its current industry classification. The firm has a current ratio of 1.56, which is typical for the industry and considered as normal.
Granite Construction investment recommendation module can be used to check and cross-verify current trade recommendations provided by analysts evaluating the entity's potential to grow using all of fundamental, technical, data market data available at the time.
We determine the current worth of Granite Construction using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Granite Construction based exclusively on its fundamental and basic technical indicators. By analyzing Granite Construction's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Granite Construction's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Granite Construction. We calculate exposure to Granite Construction's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Granite Construction's related companies.

Granite Construction Investment Alerts

Granite investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Granite Construction performance across your portfolios.Please check all investment alerts for Granite

Granite Construction Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Granite value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Granite Construction competition to find correlations between indicators driving the intrinsic value of Granite.

How Granite utilizes its cash?

To perform a cash flow analysis of Granite Construction, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Granite Construction is receiving and how much cash it distributes out in a given period. The Granite Construction cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Granite Construction Net Cash Flow from Operations is projected to increase significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 268.46 Million

Granite Construction exotic insider transaction detected

Legal trades by Granite Construction insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Granite insider trading alert for general transaction of common stock by Dowd Brian R, Senior Vice President, on 15th of March 2021. This event was filed by Granite Construction Inc with SEC on 2021-03-15. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Another angle On Granite Construction

The current price rise of Granite Construction may raise some interest from investors. The stock closed today at a share price of 37.74 on 3,210,991,360 in trading volume. The company directors and management may have good odds in positioning the firm resources to exploit market volatility in April. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.43. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Granite Construction partners.
 2018 2019 2020 2021 (projected)
Interest Expense14.57 M18.37 M21.13 M18.63 M
Gross Profit334.84 M221.68 M254.93 M279.71 M

Margins Breakdown

Granite profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Granite Construction itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Granite Construction profit margins.
Operating Margin(2.72)
EBITDA Margin0.0213
Gross Margin0.0724
Profit Margin(0.0201)

Granite Construction Average Assets is somewhat stable at the moment. Also, Granite Construction Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. The current value of Granite Construction Earnings Before Interest Taxes and Depreciation Amortization USD is 99,519,753.

Our take on Granite Construction small slip

The value at risk is down to -3.54 as of today. Granite Construction currently demonstrates below-average downside deviation. It has Information Ratio of 0.14 and Jensen Alpha of 0.62. However, we advise investors to further question Granite Construction expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Granite Construction's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Granite Construction's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Final Take On Granite Construction

Whereas many other companies in the engineering & construction industry are either recovering or due for a correction, Granite may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor quit any shares of Granite Construction at this time. The Granite Construction risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Granite Construction.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Granite Construction. Please refer to our Terms of Use for any information regarding our disclosure principles.

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