Investing
It's Still Time to Buy These Blazing Construction Stocks
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Last week’s minor selloff started to unravel some nerves as the 10-year Treasury Yield ticked over 4% and to multi-year highs. However, the broader economy has shown signs of strengthening and many construction-related companies are beneficiaries.
The growth trajectories for several up-and-coming construction-related companies are appealing at the moment. This makes now an ideal time to buy their stocks as these companies appear to be at a turning point in their growth.
Dream Finders Homes DFH: Let’s start with Dream Finders Homes which launched its IPO in 2021 and has seen its stock skyrocket 204% in 2023. Dream Finders is making a convincing case that it has the potential to be a major player in its space. Notably, Dream Finders’ Building Products-Home Builders Industry is currently in the top 2% of over 250 Zacks industries.
With its stock sporting a Zacks Rank #1 (Strong Buy), Dream Finders is a homebuilder with operations in Florida, Texas, the Carolinas, and Georgia among other states. Despite mortgage rates ticking over 7%, demand for new homes remains high due to disruptions from the pandemic.
After crushing Q2 top and bottom line expectations earlier in the month earnings estimates have soared for Dream Finders over the last 30 days. Second-quarter earnings of $0.65 per share blasted estimates of $0.32 a share by 103%. Plus, Q2 sales of $945.34 million beat expectations by 52%.
More importantly, fiscal 2023 earnings estimates have climbed 16% in the last month with FY24 EPS estimates soaring 21%. After reaching 52-week highs of $31 a share in August, the recent pullback in DFH stock may be a chance to get in before shares rip higher again.
Janus International Group JBI: One construction company that may draw investors because of its attractive stock price is Janus International Group which also launched its IPO in 2021.
Janus International is a provider of turn-key building solutions including roll-up and swing doors, hallway systems, re-locatable storage units, and facility and door automation technologies. Its noteworthy that the Building Products-Miscellaneous Industry is in Zacks top 11%.
Shares of JBI currently trade at $11 and slightly below its IPO price. With that being said, the company’s outlook is strengthening and Janus International’s stock has rebounded and risen a respectable +21% this year.
Boasting a Zacks Rank #1 (Strong Buy), earnings estimates are nicely up following Janus International’s strong Q2 results a few weeks ago. Surpassing quarterly estimates helped reconfirm the anticipation of steady annual growth.
Annual earnings are now forecasted to soar 24% this year to $0.92 per share compared to EPS of $0.74 a share in 2022. Plus, FY24 earnings are expected to jump another 11%. On the top line, sales are projected to be up 6% in FY23 and rise another 5% in FY24 to $1.13 billion.
Other Stocks to Watch
Two other stocks coveting a Zacks Rank #1 (Strong Buy) among the Zacks Construction sector and may be worthy buy the dip candidates are LSI Industries LYTS and Sterling Infrastructure STRL. Earnings estimates are trending higher with both companies surpassing their quarterly top and bottom line expectations this month.
LSI Industries is benefiting as a provider of high-quality lighting fixtures to the retail, specialty niche, and commercial markets with Sterling Infrastructure’s services in high demand upon increased infrastructure spending in the U.S. Year to date Sterling Infrastructure’s stock has skyrocketed +136% with LSI Industires’ stock soaring 32%.
Dream Finders Homes, Inc. (DFH): Free Stock Analysis Report
Janus International Group, Inc. (JBI): Free Stock Analysis Report
Sterling Infrastructure, Inc. (STRL): Free Stock Analysis Report
LSI Industries Inc. (LYTS): Free Stock Analysis Report
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