Granite Construction Does Symmetrical Triangle Breakout On Pocket Pivot

Granite Construction stock did a Symmetrical Triangle breakout today on a bullish pocket pivot signal. The breakout has occurred after the company has reported a string of contract wins over the last couple of weeks.

Analysts love Granite Construction stock. Based on their most recently released notes to investors, 6 analysts have a rating of outperform, 4 analysts have a rating of “buy”, 1 analyst has a rating of “hold”, and no analysts rate the stock as either “underperform” or “sell”.

Granite Construction reported earnings today which missed. The company reported EPS of $0.35 versus the $0.60 estimate. However, revenue beat coming in at $762.9 million versus the $678.4 million estimate.

Strong growth is taking place in Granite Construction in 2017. The company reports increased revenue opportunities and a backlog that has crossed above $4 billion for the first time in Granite’s 95 year history!

Granite is one of the largest construction companies in the US but its market cap is only $2.24 billion as of August 1, 2017. That’s a good valuation when you consider that the company’s market cap is about half of its current backlog.

Contracts are pouring in to the company. Here are some of the most recent contract wins:

Jul-31-17 = Granite Awarded $441 Million Joint Venture Design-Build Transit Project in Washington D.C.
Jul-31-17 = Granite Awarded $318 Million Bridge Project in Brooklyn
Jul-27-17 = Granite Awarded $20 Million Dam Project in Northern California
Jul-18-17 = Granite Awarded $855 Million Joint Venture Design-Build Highway Project in Texas
Jun-09-17 = Granite Construction Wins $36M Contract from Caltrans
Jun-07-17 = Granite Awarded $54 Million Highway Rehabilitation Project in Alaska

Can you imagine how big Granite Construction’s backlog will grow if we get a $1 trillion infrastructure spending program?

Public transportation and infrastructure spending overall remains steady and stable, and it will increase significantly in Washington and California.

California’s $52 billion SB 1 transportation bill was passed in April of 2017. The recently enacted 2017-2018 California budget included an increase in state transportation capital funding from less than $2 billion last year to more than $4 billion this year. Here’s the crazy thing. The $4 billion backlog does not include any SB 1 projects yet because California has said that almost half of the $4 billion will not be available for projects until the first six months of 2018.

Spending Needed To Upgrade Infrastructure

The $1 trillion infrastructure spending is only a fraction of what is needed to repair America’s aging infrastructure. The ASCE published this graphic for how much money is needed now to repair this country’s infrastructure. Note: All numbers are in billions.

Source: ASCE

The ASCE estimates that we will need to spend $4.59 trillion to update our old infrastructure.

Granite Construction Stock

Huge buying took place today after the earnings report. Notice the bullish pocket pivot (blue dot) today. The rising large player volume as the stock was dropping totally predicted the big breakout move today.

Unfortunately GVA is not a good setup right now. Prices have extended too far to the upside. For a better entry, add it to your watch list and wait for a consolidation. This market is too dangerous to be chasing any overvalued stock.

What are your thoughts on infrastructure spending and do you have an infrastructure stock you’re tracking? Leave your comments below. To find more good stocks to buy check out this lesson.