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Great Lakes Dredge & Dock Corporation Message Board

  • wolfmanran wolfmanran Mar 14, 2013 5:38 PM Flag


    Even before the after-hours haircut of 28%, GLDD was a bargain compared to its industry peers based on the following financial ratios

    Price to Book (MRQ) 1.72 vs industry avg of 2.07
    Price to Tangible Book (MRQ) 2.60 vs. 3.07
    Price to Cash Flow (TTM) 10.30 vs. 12.50

    I'm long at $6.11

    Buy hands-over-fist!

    God bless you all!

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    • From GLDD web site "....the gross profit margin was down due to costs incurred in excess of revenue recognized related to pending change orders in the demolition segment, and weather impacts and lower dredge utilization during the 2012 first and third quarters." There's nothing here to like - lost money on change orders??? Construction margins on CO's should be the best of any work they do. Ouch. Weather? so it was worse than last year? Just a was probably mentioned as unfavorable in 2011 too. If weather is always getting worse, GLDD better find a way to quantify and discuss it. That just looks bad. Lower utilization - why? Poor bids? Ineffective sales group? As the past owner of a contracting business, there's nothing worse than idle equipment. I'm sure it's much more complicated than I've laid out but GLDD needs a better story re GPM. As a non-owner, there's three reasons I'll pass on GLDD.

    • I'm going to say...not so much of a screaming buy before. The misstatement seems immaterial (maybe I missed something??). Any ratio to book value in this type of business doesn't mean much if it doesn't generate cash....which it does, but I don't see the screaming buy on cash flow. Although it does look better now. I'm not a follower or owner but there would seem to be issues if this type error exists in a 100+ year old business (ie nothing is new in demolition, dredging is there?)...and we're now just learning of it in March.

      Sentiment: Buy

4.26+0.09(+2.16%)4:00 PMEDT