Fast Growing Industrial Is Ignored By Market

| About: MYR Group, (MYRG)

One of the best things about doing extensive research on equities is when you discover a "hidden gem". A stock that is rapidly growing earnings and revenues, has low valuations, technical support and is not getting the attention its results deserve from the overall market. A perfect example of this is a company named MYR Group (MYRG) which offers a myriad reasons for picking up its cheap shares.

"MYR Group provides electrical construction service in the continental United States. The company operates in two segments, Transmission and Distribution, and Commercial and Industrial." (Business description from Yahoo Finance)

8 reasons MYRG offers good value at around $15 a share:

  1. The ten analysts that follow the stock have a median price target of $25 on MYRG, implying 60% upside from the current price. BB&T Capital Markets upgraded the shares to "Buy" in May.
  2. Two insiders made some small buys at higher prices in May.
  3. The company has easily beat earnings estimates the last two quarters and consensus earnings estimates have risen for FY2012 and FY2013 over the last three months.
  4. Earnings are ramping up. The company made 87 cents a share in FY2011. Analysts have it making $1.38 a share in FY2012 and $1.65 a share in FY2013.
  5. The stock is selling at the bottom of its historical valuation based on P/S, P/E, P/CF and P/B.
  6. The company looks like it will grow revenues north of 25% in FY2012, and the stock sports a minuscule five year projected PEG (.39).
  7. MYRG is priced at 9.3 forward earnings, a deep discount to its historical average (18.1).
  8. The stock looks like it has built solid technical support at these levels (See Chart)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MYRG over the next 72 hours.

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