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Bull of the Day: Construction Partners (ROAD)

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Unstoppable Construction Partners (ROAD) Leaves Rivals in the Dust

Construction Partners ROAD, a Zacks Rank #1 (Strong Buy), is laying down the law in the southern U.S. as the go-to construction company for roadways. Sinking competitors into the asphalt, ROAD shares are racing ahead of the market, hitting a string of 52-week highs while flexing its muscles as a top-ranked stock.

ROAD stock belongs to the Zacks Building Products โ€“ Miscellaneous industry group, ranked in the top 11% out of over 250 Zacks Ranked Industries. Known for outperforming the market, this industry group is a force to be reckoned with.

Image Source: Zacks Investment Research

Behold the impressive traits of this industry:

Zacks Investment Research
Image Source: Zacks Investment Research

Studies show that almost half of a stockโ€™s price appreciation is attributed to its industry grouping. The top 50% of Zacks Ranked Industries outshines the bottom 50% by more than 2 to 1. Investing in top industry groups like this one gives us a leg up in the market. Concentrating on leading stocks within the top 50% of Zacks Ranked Industries boosts our chances of picking winning stocks.

Company Description

Construction Partners, a raw power in civil infrastructure, constructs and maintains roadways across Alabama, Florida, Georgia, North Carolina, and South Carolina. Dominating public and private infrastructure projects, the company focuses on highways, roads, bridges, airports, and commercial and residential developments.

ROAD also crushes it in manufacturing and distributing hot mix asphalt, as well as paving activities, and site development, including the installation of utility and drainage systems. Founded in 1999 and headquartered in Dothan, Alabama, Construction Partners, Inc., formerly known as SunTx CPI Growth Company, is ramping up on every front.

Earnings Trends and Future Estimates

This construction phenomenon has a mighty earnings history, trouncing earnings estimates in three of the last four quarters. Back in August, the company reported fiscal third-quarter earnings of $0.41/share, a 28.13% surprise over the $0.32/share consensus estimate. Construction Partners boasts an impressive four-quarter average earnings surprise of 10.6%.

ROAD shares are soaring as analysts raising their Q4 earnings estimates. For the fiscal fourth quarter, earnings estimates have soared 6.12% in the past 60 days. The Q4 Zacks Consensus EPS Estimate now stands at $0.52/share, showing a whopping potential growth rate of 108% compared to the year-ago period.

Zacks Investment Research
Image Source: Zacks Investment Research

Letโ€™s Get Technical

ROAD shares have catapulted over 50% in the last six months. This stock is a prime contender for our portfolio โ€“ itโ€™s on a winning streak with positive earnings estimate revisions.

Image Source: StockCharts

Check out how both the 50-day (blue line) and 200-day (red line) moving averages are climbing. The stock is making numerous 52-week highs, leaving major indices in the dust. With strong fundamentals and technical performance, ROAD stock is revving up for more outperformance.

Research shows a strong link between short-term stock movements and trends in earnings estimate revisions. As we know, Construction Partners has recently experienced upward revisions. As long as this upward trend holds (and ROAD keeps knocking it out of the park with earnings beats), we can expect the stock to keep zooming into the end of the year and beyond.

Bottom Line

Construction Partners roars ahead in our Zacks Style Scores, boasting top marks in Growth. This points to further upside based on favorable earnings and sales metrics.

Fueled by a top industry group and an outstanding track record of beating earnings, itโ€™s clear why this company is an irresistible investment. Strong fundamentals paired with an exciting technical trend justify adding shares to the mix. The future is shining bright for this top-tier, dominant stock.

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Construction Partners, Inc. (ROAD) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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