Is Now An Opportune Moment To Examine Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD)?

Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), might not be a large cap stock, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Great Lakes Dredge & Dock’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Great Lakes Dredge & Dock

What's The Opportunity In Great Lakes Dredge & Dock?

According to our valuation model, Great Lakes Dredge & Dock seems to be fairly priced at around 13.10% above our intrinsic value, which means if you buy Great Lakes Dredge & Dock today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $7.59, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Great Lakes Dredge & Dock’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Great Lakes Dredge & Dock generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 25% over the next year, the near-term future seems bright for Great Lakes Dredge & Dock. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GLDD’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on GLDD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. To that end, you should learn about the 2 warning signs we've spotted with Great Lakes Dredge & Dock (including 1 which doesn't sit too well with us).

If you are no longer interested in Great Lakes Dredge & Dock, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.