Badger Daylighting (TSX:BAD) is a Calgary-based company that specializes in soil excavation. The stock has been an impressive growth story over the past decade, but it has been hit with turbulence in the second half of this year. Shares have dropped 18% over the past three months as of close on November 19.
Investors got a look at Badger’s third quarter 2019 results on November 5. Revenue rose 9% year-over-year to $183.7 million as performance lagged in Canada. However, revenue shot up 12% in its U.S. operations. Badger struggled in Canada due to reduced oil and gas activity, but this was partly offset by a positive performance in Eastern Canada.
These results fell below analyst expectations, and the stock took a further hit as Badger narrowed its 2019 financial outlook. It now projects adjusted EBITDA between $155 million and $170 for the full year, compared to its previous forecast which fell between $170 million and $190 million.
Fortunately, its hydrovac build rate for 2019 of between 190 to 220 units with retirements of 40 to 60 units remained unchanged.
The company’s operational performance was still impressive in the third quarter. It was weighed down by broader pressures, but this may present a great buy-low opportunity for onlookers. The stock is now trading close to its 52-week low, while boasting a price-to-earnings ratio below 20.
Shares last had an RSI of 43, but it has spent nearly a month in technically oversold territory.
Badger has an excellent balance sheet and is still well-positioned for growth as we move into 2020. To add to that, it also offers a monthly dividend of $0.0475 per share. This represents a modest 1.6% yield.
