Badger Daylighting Ltd. (TSX:BAD) is a Calgary-based company that provides non-destructive hydrovac excavation services based on its Badger Hydrovac System. Shares of Badger have climbed 16.4% in 2018 as of close on November 28. The stock has climbed 30% over a three-year period.
Badger stock fell to six-month lows in October before it steadily rebounded into November and spiked on its third-quarter earnings release. The company reported adjusted EBITDA of $50.9 million or $1.37 per share in the quarter which was a 31% increase year over year. Revenue also rose 20% to $168.7 million.
Although Badger provides services to the oil and gas industry, its business is not inextricably tied to price fluctuations which have severely hurt the Alberta oil patch in the fall. Badger has made very positive strides in its U.S. business, where revenue is up 27% compared to the first nine months of 2017. Revenue reported 32% year-over-year growth in 2017.
The solid quarter saw Badger reaffirm its outlook for the full-year in 2018 and 2019. It anticipates 2019 adjusted EBITDA in the range of $170 million to $190 million with a hydrovac build between 190 to 220 units and retirements between 40 and 60 units.
Badger stock finished November 28 with an RSI of 64, which means the stock is pricey heading into December. However, the TSX index looks poised to finish off the year strong after U.S. policymakers gave markets a boost when they hinted at pausing interest rate hikes.
The broader tailwind could be beneficial for Badger stock in the final weeks of the year, but regardless the stock is a fantastic long-term pick-up.
