Primoris Services increases after finding support 14 May 2019

NEWS BITES - NORTH AMERICA

Primoris Services Corporation (NASDAQ:PRIM), the NASDAQ's largest Engineering & R&D company by market cap, has increased 0.9% after hitting the lower Bollinger Band three times in the last ten days. This is a bullish signal. The lower Bollinger Band marks the trajectory of support on a stock price. Primoris Services' stock price has increased 19.0c (0.9%) from its previous trading session to close at $US20.25 on Tuesday. Compared with the NASDAQ-100 Index which rose 77.8 points (1.1%) in the day, the relative price change was -0.1%. There were 146,700 shares worth $US3 million traded today. The volume was 0.7 times the average daily trading volume of 211,274 shares. Its MCap is $US1 billion.

BULLISH TURNING POINT

Relative Strength Index (RSI)

The Relative Strength Index (RSI) of 29.9 has breached the oversold line of 30, suggesting the price decrease of 9.2% in the last 14 days is unusually high. The RSI was previously 31.6.

Highlights in today's Report:

SECTION 1 TODAY'S BULLISH SIGNALS

SECTION 2 TODAY'S BEARISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US20.25):

SECTION 4 THE PAST WEEK

SECTION 5 BULLISH PARAMETERS

SECTION 6 BEARISH PARAMETERS

SECTION 7 SUMMARY FINANCIALS

SECTION 8 CORPORATE PROFILE

SECTION 1 PRIMORIS SERVICES BULLISH SIGNALS

1.1 Undervaluation [compared with sector average]:

+ Price/Earnings of 13.4 [14.1]. We estimate Primoris Services stock is trading at a current year P/E of 7 and a forward year P/E of 3.7. The P/E of 13.4 plus annual inflation in the United States of 1.9% adds up to 15.3, well within the value benchmark Rule of 19.

+ The reciprocal of P/E or Earnings yield of 7.5% is 3.1 times the 10-year bond yield of 2.41%.

+ The relative yield of PRIM, defined by its yield of 1.2%, divided by average yield of dividend yielding stocks in the NASDAQ-100 Index of 1.0% is 116.7%. This suggests Primoris Services stock is undervalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.6. Compared with the rest of the market the stock is undervalued.

1.2 Undervaluation Indicators and rank of Primoris Services in the NASDAQ market:

DescriptionValueRank In Market
Price to Sales0.3In Top Quartile

1.3 Short Selling:

+ The current short volume is 0.9 times its own historical average of 0.1%.

1.4 Oversold/Bullish Signals:

+ The Relative Strength Index (RSI) of 29.9 has breached the oversold line of 30, suggesting the price decrease of 9.2% in the last 14 days is unusually high.

+ The stock is oversold according to the Williams % R indicator of -88.2, suggesting the price is close to its 14-day low of $US19.75.

+ The Stochastic indicator of 7.3 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

SECTION 2 PRIMORIS SERVICES BEARISH SIGNALS

2.1 Overvaluation [compared with sector average]:

+ Price/Earnings/Growth of 1.9 [0.5]. The price earnings ratio of 13.4 divided by annual growth in EPS (FY2018 vs FY2017) of 7.1% corresponds to a P/E/G of 1.9 times.

+ Price to Book of 3.2 [3.0].

2.2 Overvaluation Indicators and rank of Primoris Services in the NASDAQ market:

DescriptionValueRank In Market
Price/Earnings/Growth1.9In Bottom Quartile

2.3 Increasing Put Call Ratio:

+ Put Call Contracts

The Put/Call ratio has jumped from 3.529 to 3.529 suggesting a downtrend.

Put ContractsCall ContractsPut/Call ratio
Today120343.529
Previous day120343.529

2.4 Downtrend:

+ Primoris Services Corporation is placed 2234/2479 in BuySellSignals' ranking of NASDAQ performers in the past week, a percentile ranking of 10.

+ In the past week, volume was 1.1 times average and the shares were down 10.6%. Tuesday's close price is at a 1.9% discount to its 5-day Volume Weighted Average Price (VWAP) of $US20.65.

+ The present value of $US1,000 (PV1000) invested one month ago in Primoris Services is $US941, for a capital loss of $US59.

SECTION 3 PRIMORIS SERVICES PRICE VOLUME DYNAMICS

Volatility:

+ Primoris Services is at a discount of 29.3% to its 12-month high of $US28.65 on July 12, 2018. It is also at a premium of 14.0% to the 12-month low of $US17.77 on January 02, 2019.

RECAP FROM PREVIOUS REPORTS (UPDATED AT THE LAST PRICE OF $US20.25):

SECTION 4 THE PAST WEEK

4.1 Snapshot: Primoris Services stock was down $US2.41 or 10.6% in the past week. Volume in the week was 1.1 times average trading of 1.1 million shares. It underperformed the NASDAQ-100 index in 3 out of 5 days.

DayPrimoris ServicesClose price [USD]Price change %Relative change %Comment
MondayLoses $US25.9 million in MCap, steepest heavyweight fall in Engineering & R&D sector20.06-2.51.0VI*=1.5
FridayKeeps sliding, down 9.1% in 3 days20.57-0.5-0.5
ThursdayDown 8.8% in 2 days20.67-3.0-2.5
WednesdayLoses $US69 million in MCap, steepest heavyweight fall in Engineering & R&D sector21.3-6.0-5.7Steepest Fall; VI*=1.8
TuesdayAdds $US53.3 million in MCap, top heavyweight rise in Engineering & R&D sector22.664.96.8Top Rise; VI*=2.1

[Volume Index (VI); 1 is average]

4.2 Corporate Wires: Primoris Services (PRIM) issued one Release in the past week.

May 09: Primoris Services announces dividend

Primoris Services today announced a quarterly dividend of 6.0c per share. The ex dividend date is Thursday, June 27, 2019 and the record date is Friday, June 28, 2019 and it is payable on Monday, July 15.

4.3 Stock Buzz: Past Week

News DateHeadlinePublisher
May 13Primoris Services Corp (PRIM) Given Average Rating of Hold by Brokeragestheenterpriseleader.com

SECTION 5 PRIMORIS SERVICES BULLISH PARAMETERS

5.1 Performance:

+ Return on Equity 14.4% [10.3%].

+ Return on Assets 5.5% [4.5%].

+ Return on Capital Employed 11.7% [9.6%].

+ As per the Du Pont analysis, Return on Equity [ROE] of 14.4% is better than sector average of 10.4%. ROE is computed as net profit margin of 3.0% times asset turnover [sales/assets] of 1.8 times leverage factor [total assets/shareholders' equity] of 2.6.

5.2 Growth:

Quarterly Trend in Revenue, Net Profit and Net Profit Margin:

+ Net Profit margin is positive and has seen consecutive rises in recent quarters. [All figures in %]

Qtr-endedRevenue GrowthNet Profit GrowthNet Profit Margin
Dec 18 [Q4]-3.4-13.9
Sep 18 [Q3]--3.8

5.3 Present value of USD1,000 invested ten years Ago

+ The present value of USD1,000 (PV1000) invested ten years ago in Primoris Services is $US4,823, including a capital gain of $US3,583 and dividend reinvested of $US240.

+ 10 years Multiplier in USD = 4.823x

+ Annualized Total Shareholder Returns (TSR) in USD = 17.0%

5.4 Increased VWAP

Past five years, 12 months ended May 14 (USD)

YearHigh PriceVWAPLow Price
201928.6523.6917.77
201829.4926.1622.03
201728.5520.7915.69
201624.4319.3315.36
201529.8921.7916.02

In the past five years Volume Weighted Average Price (VWAP) has increased by 8.7% to $US23.69. Based on a dynamic start date of five years ago, there have been declines in VWAP in 2 out of 5 years.

5.5 Decrease in Insider Selling

In the past 5 years a total of 4,413,390 Primoris Services shares (or 8.7% of the total shares on issue) worth $US117 million were sold by insiders. Based on a dynamic start date of 5 years ago, insider selling has averaged 882,678 shares per year. In the past year, insiders sold 1,718,190 shares, a decrease of 11.3% from the previous year.

SECTION 6 PRIMORIS SERVICES BEARISH PARAMETERS

6.1 Performance:

+ Net profit margin has averaged 2.5% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

6.2 Growth:

+ Year-on-Year Earnings Growth of 7.1% [30.4%].

6.3 High Debt Indicators:

+ Total Liabilities/EBITDA of 8.7 compares unfavourably with the Joseph Piotroski benchmark of 5.

6.4 Low Growth and Performance Indicators and rank of Primoris Services in the NASDAQ market:

DescriptionValueRank In Market
EPS Growth %7.1In Bottom 6%
EBITDA Margin %3.9In Bottom Quartile

6.5 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the real rate of return has averaged -3.5%. The Moving Annual Return has been positive in 3 out of 5 years.

PRIMClose (USD)Dividends (USD)Capital Gain / (Loss) %% YieldAnnual Return %
May 1420.250.24(18.0)1(17.1)
1 Yr ago24.710.236.517.5
2 Yrs ago23.20.2314.61.215.8
3 Yrs ago20.240.2311.81.313.1
4 Yrs ago18.110.15(37.3)0.5(36.8)

Close 5 years ago $US28.89

6.6 Declining ADVT past five years

Avg. Daily Volume Traded 12 months ended May 14, thousand shares

YearADVT
2019211.3
2018236.1
2017227.7
2016262.0
2015273.9

In the past five years, Average Daily Volume of Trading (ADVT) has decreased 22.9% to 211,274 shares.

6.7 Declining Average Daily Turnover

Past five years, 12 months ended May 14 (USD million)

YearAverage Daily Turnover
20195.0
20186.2
20174.8
20165.1
20156.0

In the past five years, average daily share turnover has decreased 17.0% to $US5 million. This suggests decreased liquidity.

SECTION 7 PRIMORIS SERVICES SUMMARY FINANCIALS

7.1 Dividend History

+ Trailing 12 months dividend for the 12 months ended May 14 has improved from 15.50c in 2015 to 24.0c in 2019.

7.2 Financials Summary

Year endedDec 2018Dec 2017Dec 2016
Sales (USD B)2.92.42
Pretax (USD M)113.4105.348.9
Net (USD M)77.572.426.7
EPS (USD)1.511.410.52

+ Net profit was up 7.1% from US$72.4 million in 2017 to US$77.5 million in 2018.

+ Earnings Per Share (EPS) was up 7.1% from $US1.41 to $US1.51.

SECTION 8 CORPORATE PROFILE

8.1 Activities

Primoris Services Corporation is a holding company of various subsidiaries, which cumulatively form a group of specialty contractors and engineering companies in the Western United States, primarily serving the power and energy sectors. The Company provides a range of construction, fabrication, maintenance and replacement services, as well as engineering services to public utilities, petrochemical companies, energy companies, municipalities and other customers. The Company is a water and wastewater contractor in Florida. It is also a specialist in designing and constructing complex commercial and industrial concrete structures in California.

8.2 Top Management

The chairman is Brian Pratt, the chief executive officer is David King and the chief financial officer is Kenneth M. Dodgen.

8.3 Issued Capital and MCap

Based on 50,716,000 issued shares the market capitalisation is $US1 billion.

8.4 Vanguard Total World Stock ETF 7580:

The stock was one of 7580 global stocks selected by Vanguard Total World Stock ETF (VT). As at Mar 31, 2019, the Vanguard Total World Stock ETF held 16,200 shares worth $US358,226 by value of the ETF's portfolio [Ranked 4089 out of 7580 by value and 588 out of 679 for NASDAQ].

COMPANY IDENTIFIERS

Contact: +1 214 740-5600

Physical Address: 2100 McKinney Avenue, Suite 1500, Dallas, TX,75201

State/Province/Country: TX, United States

Country of Incorporation: United States

Industry [NAICS]: 541330

Exchange: NASDAQ

ISIN: US74164F1030

O:PRIM; PRIM.O

PermID: 4295902703

RIC: PRIM.O

CIK: 1361538

CUSIP: 74158R105

Primoris Services Corp

Source: www.BuySellSignals.com