U.S. Markets close in 41 mins
  • S&P 500

    -8.92 (-0.26%)
  • Dow 30

    -193.78 (-0.70%)
  • Nasdaq

    +51.75 (+0.46%)
  • Russell 2000

    -11.79 (-0.73%)
  • Crude Oil

    +0.89 (+2.31%)
  • Gold

    +4.20 (+0.22%)
  • Silver

    +0.06 (+0.25%)

    +0.0006 (+0.0473%)
  • 10-Yr Bond

    -0.0230 (-2.87%)
  • Vix

    +0.37 (+1.14%)

    +0.0032 (+0.2454%)

    -0.3460 (-0.3300%)

    +517.40 (+3.95%)
  • CMC Crypto 200

    +8.91 (+3.41%)
  • FTSE 100

    -63.02 (-1.09%)
  • Nikkei 225

    -8.54 (-0.04%)

Aegion's Contract Winning Spree Continues, Wins $6.9M Deal

Zacks Equity Research

Aegion Corporation’s AEGN subsidiary — Insituform Technologies, LLC — has inked a $6.9-million contract to rehabilitate more than 26 miles of 8-36 inche diameter wastewater pipelines in Miami-Dade County in Florida. The company will carry out the rehabilitation with cured-in-place pipe (CIPP) technology. The work is scheduled to begin in late 2019 and is expected to be completed within the two-year period. The contract also includes an option for additional two-year renewal.

Aegion provides solutions to rehabilitate, maintain and strengthen infrastructure across the world. Since 1971, the company has been providing trenchless solutions, particularly in residential areas. It replaces the conventional dig-and-replace method with the help of CIPP technology.

Aegion’s Contract Winnings Spree Continues

In September, the company inked a $15.7-million deal to rehabilitate more than 22 miles of small, medium and large-diameter wastewater pipelines in Georgia. It also inked a $9.1-million deal to renovate Michigan’s wastewater pipelines that are approximately 11,000 feet and 30-72 inch in diameter.

Aegion’s Infrastructure Solutions, which contributed 48.8% to second-quarter 2019 revenues, has completed several large wastewater pipeline projects. The company has held the annual contract for CIPP in Miami-Dade for the past four years and has completed a majority of its installation work in the area for the past five years.

Infrastructure Solutions business — the largest contributor to Aegion’s top line — registered solid margin expansion in the last reported quarter. The upside can be attributed to solid growth in the North America CIPP business and the exit of underperforming international CIPP operations. Notably, the segment’s adjusted gross and operating margins increased 260 basis points (bps) and 310 bps, respectively, during the second quarter 2019.

Notably, for the Infrastructure Solutions business, Aegion predicts 2019 revenue growth in the range of 2-4% after adjusting for the effect of exited or to-be-exited operations. The upside will be supported by improvements in crew productivity and project mix within North America CIPP.

Notably, Aegion’s shares have gained 5.5% in the past six months compared with the industry’s growth of 3.6%. A series of contract wins is expected to generate higher revenues in the upcoming quarters and boost price performance.

Zacks Rank and Other Key Picks

Aegion currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the same space are Construction Partners, Inc ROAD, Quanex Building Products Corporation NX and Advanced Drainage Systems, Inc WMS. While Construction Partners and Quanex flaunt a Zacks Rank #1 (Strong Buy), Advanced Drainage System carries a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank stocks here

Construction Partners’ earnings for third-quarter 2019 are expected to grow 20.7%.

Quanex’s earnings are expected to rally 46.2% for the current year.

Advanced Drainage Systems’ return on equity is pegged at 34.9% compared with the industry’s 12.7%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Drainage Systems, Inc. (WMS) : Free Stock Analysis Report
Aegion Corporation (AEGN) : Free Stock Analysis Report
Quanex Building Products Corporation (NX) : Free Stock Analysis Report
Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research