Tony Dwyer of Canaccord Genuity says that there’s this narrative out there that the yield curve flattening is telling you that the economy is closer to recession and the stock market is in trouble. Tony Dwyer disagrees and thinks the yield curve shows that now is a terrific time to buy stocks (link to CNBC article above).
Tony Dwyer says that the U.S. Treasury yield curve as measured by the six month to 10-year spread has historically signaled at least two more years until a bull market peaks and then goes into a recession.
The yield curve could continue to flatten for another two years before going flat or inverted and then once it does, it takes another 3 to 6 months for a recession to hit so Tony Dwyer could be right about the 2 year time-line but his logic is wrong.
The problem with Dwyer’s logic is that you can’t just look at the spread. You have to consider that the current rate hike cycle is different than any other cycle Dwyer uses on his chart. Never before has the Fed hiked rates in an economy this weak with inflation so low.
To accept Dwyer’s argument, you’d need to really embrace tunnel vision and losing sight of the forest for the trees.
May 31, 2016: Canaccord Genuity raised Tetra Tech Inc to a Buy rating, from Hold, and set a price target of $37. Canaccord analyst raise price target $37 from $30, citing increased…
June 15, 2016: Tetra Tech Inc was awarded a $45 million US Army contract. The company announced they were awarded a $45,000,000 firm-fixed-price, multi-year contract with options for nationwide architectural/engineering services for the Army and Air National Guard. Bids were solicited via the Internet with 33 received.
More Tetra Tech News
May 31, 2016: Canaccord Genuity raised Tetra Tech Inc to a Buy rating, from Hold, and set a price target of $37. Canaccord analyst raised price target $37 from $30, citing increased conviction on several positive catalysts for stock including successful integration of Coffey acquistion, looming backlog growth from DOD spending, and long-term opportunities for smart water.
May 19, 2016: Tetra Tech Inc was awarded an additional $84 million contract from the USAID. Tetra Tech announced today that the United States Agency for International Development (USAID) has awarded the Company an additional $84 million to its current $64 million contract under the U.S. Government-led Power Africa partnership.
Under its Power Africa contract, Tetra Tech is advancing a robust pipeline of power generation projects to financial close, designing innovative approaches to develop small-scale clean energy projects to increase access in rural areas, supporting the strengthening of regulatory and institutional policies, and providing direct programmatic support to the Power Africa Coordinators Office.
April 27, 2016: Tetra Tech Inc reports Q2 2016 EPS of $0.37 versus the $0.35 estimate. Revenue also beat coming in at $617 million versus the $467 million estimate. The company’s backlog grew to $2.1 billion or +18% year over year.
The CEO says, “Tetra Tech delivered strong results for the second quarter of fiscal 2016 with 36% EPS growth driven by a wide range of commercial, municipal and international development projects globally. Backlog increased to more than $2.1 billion, providing Tetra Tech a solid base for future growth. In addition to strong performance in our ongoing operations, our recent acquisitions have also advanced our growth strategy. Since the addition of Coffey this January, we have already begun to realize the benefit of our combined platforms, particularly in international development. In the second quarter, we further expanded our smart water and federal IT growth strategies through the acquisition of INDUS.”
April 25, 2016: Tetra Tech Inc was awarded a $28 million contract for improved water management in Jordan. The U.S. Agency for International Development (USAID) has awarded the Company a $28 million, single-award contract to improve water sector management and governance in Jordan. Under the five-year project, Tetra Tech will support the Government of Jordan to achieve measurable improvements and greater sustainability of the water sector. Tetra Tech will provide technical assistance to strengthen the governments efforts in reform, capacity building, and policy development and implementation.
Tetra Tech will help improve the sustainability of Jordans water supply systems, improve water conservation and water governance systems, and protect water resources. Through targeted technical assistance and capacity building, Tetra Tech will support the implementation of improved utility management practices, especially those related to non-revenue water reduction and improved cost recovery. Tetra Tech also will develop water demand management programs and behavior change communication strategies aimed at enhancing water conservation.
April 07, 2016: Tetra Tech Inc was awarded a $47 million contract with the U.S. Army Corps of Engineers Institute for Water Resources. A five-year multiple-award task order contract to support the USACEs water resources management programs. The contract has a total award value of up to $47 million. Tetra Tech will support USACE IWR in its mission to identify and address emerging water resources issues, develop state-of-the art methods and modeling tools, and manage national water data sets.
Tetra Tech will provide analytical and consulting services to conduct research, analysis, and technical assistance for multiple USACE centers. These centers include USACE Headquarters; District and Division offices; the Hydrologic Engineering Center in Davis, California; the Risk Management Center co-located in Pittsburgh, Pennsylvania, and Denver, Colorado; and the Waterborne Commerce Statistics Center located in New Orleans, Louisiana.
March 31, 2016: Tetra Tech Inc was awarded a $20 million USAID El Salvador governance project. Tetra Tech, Inc. announced that the U.S. Agency for International Development (USAID) has awarded the Company a five-year, $20 million, single-award contract to improve transparency and accountability of key government institutions in El Salvador.
Tetra Tech will work with the Government of El Salvador to strengthen accountability and professional standards at the national and municipal levels. The project seeks to expand citizen oversight, participation, and awareness of government reforms by increasing the capacity of civil society to monitor public resources. Tetra Tech will use innovative approaches such as information technology tools and social media to implement these initiatives.
March 14, 2016: Tetra Tech Inc announced today that it has acquired INDUS Corporation of Vienna, Virginia. INDUS is an information technology (IT) solutions firm focused on data analytics, geospatial analysis, secure infrastructure, and software applications management for U.S. federal government customers. The company has more than 150 employees and brings significant federal contracts in the IT sector.
The terms of the acquisition were not disclosed. INDUS is joining Tetra Techs Water, Environment & Infrastructure business segment. The McLean Group, LLC, advised INDUS Corporation in the transaction.
November 17, 2015: Tetra Tech (TTEK Updated Trend Analysis) awarded $500M AE services contract from the US Air Force. Tetra Tech, Inc. announced it was awarded an indefinite delivery, indefinite quantity contract by the U.S. Air Force for architectural-engineering services worldwide (A-E13 Environmental Services). This multiple-award contract ceiling is $500 million. Tetra Tech will support the U.S. Air Force Civil Engineer Centers environmental program at various government installations in the United States and other worldwide locations. Tetra Tech will provide technical services for restoration, pollution prevention, and compliance for environmental projects. Work may include all aspects of remediation systems design, advanced planning, investigations, geospatial data analysis, conceptual design, value engineering, monitoring, and optimization of environmental treatment or control systems. The base contract period is five years with two additional option years.
October 5, 2015: Tetra Tech (TTEK Updated Trend Analysis) awarded $600M USAID global architect-engineer services contract Tetra Tech, Inc. announced it was awarded a global indefinite delivery, indefinite quantity contract for architect-engineer (A-E) services with the U.S. Agency for International Development (USAID). The ceiling under this five-year, multiple-award contract is $600 million. USAID administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide. Tetra Tech will provide A-E services including design, construction supervision, and related services to develop vitally important infrastructure in developing countries. Tetra Tech will support USAID in providing access to clean water, sanitation, health care, schools, energy, and transportation infrastructure, while helping to build local capacity, strengthen local institutions, empower women, and promote long-term sustainability.
Tetra Tech (TTEK Updated Trend Analysis) is a leading provider of consulting, engineering, program management, and construction management services. Tetra Tech provides consulting, engineering, program management, construction management, and technical services for water, environment, energy, infrastructure, and natural resources sectors.
Tetra Tech published this video about their company: