Orion Marine Group, Inc (ORN) recently provided update on the scope of its business and end markets. However, the news, coming on Jan 8, failed to move investors’ sentiments, as evident from a 2.7% dip in the shares on Friday.
The civil marine construction and specialty services provider claimed to witness a significant improvement in asset utilization in the fourth quarter of 2014, driven by increased lettings on part of the US Army Corps of Engineers. Additionally, the Port of Houston expansion project aided the company’s utilization levels.
In the past quarter, Orion Marine received contracts worth $60 million against an approximate bid value of $290 million. Going forward, the company expects to win another $50 million of contracts approximately, as it still has outstanding bids amounting to $230 million left. These opportunities are expected to drive the company’s business in the quarters ahead.
On the government front, the company remains optimistic about short-term opportunities. Specifically, Orion Marine expects to win projects related to construction of bridges, ferry landings, repair and maintenance works, which are likely to be issued from the state departments of transportation.
The company has also been benefiting from ongoing improvements in arenas like infrastructure and expansion of ports. Further, the increasing utilization of waterborne transportation, in addition to higher demand for larger transportation vessels, is expected to act as one of the key drivers for the company’s growth, going forward.
On the other hand, Orion Marine expects its private sector growth to be led by ongoing developments in the waterside infrastructure. However, owing to the recent crash of the oil prices, its energy-related business has been facing some uncertainties.
So far, Orion Marine has been able to maintain its performance despite the current oil and gas industry scenario. Nevertheless, the issue can become a headwind for the company in the near future.
Orion Marine currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader space include Great Lakes Dredge & Dock Corporation (GLDD), Tutor Perini Corporation (TPC) and Beazer Homes USA Inc. (BZH). All these stocks carry a Zacks Rank #2 (Buy).
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