Stock market dynamics continue to change. While we’re in a period of economic turbulence, rock bottom interest rates have buoyed stock prices and helped cyclical stocks outperform in this environment. In this article, I’m going to discuss my outlook for a highly cyclical stock, Badger Daylighting (TSX:BAD) and specifically where I see this stock headed long-term.
Badger Daylighting is in the business of industrial pumping, or daylighting, of difficult to access areas for various corporate or government clients. The company’s business is diversified across a number of sectors. However, this business exposure to the oil and gas sector has led to some downside volatility the company experienced during the March double-whammy of record low oil prices and COVID-related selling.
Badger has begun transitioning away from direct exposure to this sector toward infrastructure, focusing on various pipeline customers which have been steady of late. Badger’s business model’s stability is derived from its sector diversification as its clients are mainly in highly cyclical business, adding some volatility to this company’s cash flows.
This is a stock which is on my watch list now and I’d encourage readers to take a look at Badger moving forward, particularly as infrastructure stimulus spending increases materialize, depending on the outcome of the U.S. election coming up in about a month.
Invest wisely, my friends.
