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Top Picks 2020- NV5 Global NVEE

NV5 Global (NVEE) is a top recommendation for the coming year; the company is a provider of professional and technical engineering and consulting solutions to public and private sectors, explains Tom Bishop, editor of BI Research.

See also: Top Picks 2020: Chart Industries (GTLS)

NV5 focuses primarily on five business verticals: construction quality assurance, infrastructure engineering and support services, energy, program management and environmental solutions.

In a nutshell here is why I like NV5. The stock is currently trading at 22 times trailing earnings, 15 times full year 2019 consensus EPS of $3.40, and just 11 times the mid-point of guidance for 2020 ($4.32- $4.78).

The company has grown EPS rapidly in recent years. Here is the EPS progression starting in 2013: $0.70, $0.87, $1.41, $1.53, 2.38, $3.24 in 2018, $3.40 expected for 2019 (after a temporary hiccup in Q3 due to a few project delays), with a 30% increase to $4.55, the midpoint of company guidance, expected for 2020.

See also: Top Picks 2020: Hannan Metals (Vancouver: HAN) (OTC Pink Sheets: HANNF)

If the shares can just command the trailing 22 PE currently prevailing, by the end of 2020 the shares would be trading at $100 (22 X $4.55).

With a record like the above, and growth of 30% on tap for 2020, I think a PE of 22 would be on the low side, especially in light of the ample valuations in the stock market today after a 10 year bull market, but let’s go with that (you could make a case for a PE of 30). In other words, the shares could double from here in 2020.

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