Construction partners pave the way for a breakout as Nvidia skids

While the road ahead for Magnificent Seven shares please Nvidia (NVDA), Alphabet (GOOGL), Metaplatforms (META) And Tesla (TSLA) becomes bumpy, less glamorous Construction partners (AWAY) appears to be paving the way for a breakthrough to a record high.

Construction Partners has landed on Investor’s Business Daily’s Breakout Stocks Index, which is updated weekly. In recent months, Nvidia, Meta, and Google stocks have all been on and off this list, but currently no Mag 7 names make the cut.

↑
X

NOW PLAYING
Find top growth stocks with the IBD Screen of the Day

Construction partners on their way to 50% growth

Construction Partners operates in six southeastern states and focuses on the construction, repair and maintenance of above-ground infrastructure. Government-funded projects make up the bulk of activities.

Runways include local and state roads, interstate highways, airport runways and bridges. The Alabama-based company also handles private sector projects such as paving and construction work for office and industrial parks, shopping centers, local businesses and residential developments.

Over the past four quarters, Construction Partners has achieved earnings growth ranging from 78% to 375%. When the company reports second-quarter earnings on August 9, analysts predict a gain of 32% to 54 cents per share.

Furthermore, after 129% earnings growth to 94 cents per share in 2023, Wall Street expects 50% earnings growth to $1.41 per share for fiscal 2024. The path for 2025 also looks solid, with analysts expecting growth of 26% forecast to $1.78 per share. .

Sales growth has ranged from 11% to 21% over the past four quarters. In the first quarter, Construction Partners posted growth of 14% to $371.4 million. When the company reports later this month, it is expected to cross the half-billion mark with 19% growth to $503.6 million.

See all the names on the IBD Breakout Stocks Index

Entering a strong building and construction market

With a strong one 98 Composite rating, Construction Partners ranks high in IBD’s Building-Heavy Construction industry group. Only Argan (AGX) And Granite construction (GVA) with the highest possible Composite Rating of 99.

The accumulation/distribution ratings for the group leaders also show demand. Construction Partners has a strong B+ rating. Argan and Granite Construction deserve an even better A grade.

Despite some recent setbacks, Nvidia still had a Composite Rating of 99 and a spot alongside construction leader Argan, Nvidia on a list of 18 “perfect” stocks. But the artificial intelligence powerhouse lost its highest possible Composite Rating of 99 on Tuesday NVDA dropped to a 97. Nvidia has also seen its accumulation/distribution rating drop to a D-.

ROAD Stock Paves the Way to a Breakout

Construction Partners has been on an upward trajectory since hitting a low in July 2022. The 10-week moving average has also risen as shares have touched multiple bases.

The latest formation is a third phase of consolidation with a buy point of 62.35. Construction Partners briefly approved that submission last week before withdrawing. But shares have recovered and are now teasing the buy zone. The relative strength line has risen and is now near a 52-week high.

While Nvidia ran into trouble again on Tuesday and fell 7%, Construction Partners managed to maintain a gain of 1.2%.

In another sign of technical strength, ROAD stock’s 21-exponential moving average has climbed back above the longer-term 50-day line.

Colleagues from the construction sector, Argan and Granite Construction, continue their impressive steps. Meanwhile, Nvidia’s troubles remind investors to heed the “secrets” of selling.

IBD Breakout Opportunities ETF

The IBD breakthrough opportunities (HISTORY) Innovator Capital Management’s exchange-traded fund tracks the IBD Breakout Stocks Index. Like other index ETFs, this fund allows you to invest in the entire index in addition to or instead of buying individual stocks. Read more here about the ETF and Innovator.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

YOU MAY ALSO LIKE:

Nvidia Breach highlights 8 ‘secrets’ of selling. No. 2 is the key.

Wake-up calls are still ringing for Nvidia, Google, Meta and more

Microsoft and Google lead list of new purchases by top funds

Generate new stock ideas with IBD Stock Screener

Identify bases and buy points with this pattern recognition tool