Core Viewpoint - Great Lakes Dredge & Dock Corporation has received four significant work awards, enhancing its role in the U.S. energy infrastructure and contributing to its revenue visibility for 2025 and beyond [5][7]. Group 1: Work Awards - The company has been awarded a dredging contract for the Woodside Louisiana LNG project, which includes the construction of a ship berthing basin for LNG carriers, with operations expected to start in early 2026 [1]. - The Galveston Entrance Channel and Houston Ship Channel maintenance project involves dredging to maintain operating depths, with work expected to commence in the third quarter of 2025 and complete by the fourth quarter of 2025 [2]. - The Mississippi River Hopper Dredge Contract No. 3 involves rental of a dredge for maintenance dredging on the Mississippi River, with work having started in May 2025 [3]. - The Charleston Entrance Channel project, awarded in the first quarter of 2025, has been completed in the second quarter of 2025 [4]. Group 2: Financial Aspects - The awarded projects include financial figures: Galveston Entrance Channel and Houston Ship Channel project is valued at $36.2 million, Mississippi River Hopper Dredge Contract No. 3 at $17.6 million, and Charleston Entrance Channel at $10.8 million [7]. Group 3: Company Overview - Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the U.S., with a history of completing significant international projects and a diverse fleet of approximately 200 specialized vessels [6]. - The company is expanding its core business into the offshore energy industry and employs experienced engineering staff for project management [6].

Financial Performance - Great Lakes Dredge & Dock Corporation (GLDD) reported Q1 2025 revenue of $243 million[14], a $44.2 million increase compared to Q1 2024[80] - Adjusted EBITDA from continuing operations was $60.1 million for Q1 2025[78], a $17.2 million increase from Q1 2024[78] - The company's dredging backlog ended Q1 2025 at $1 billion[14], with 95% from capital and coastal protection projects[15] - The company has liquidity of over $300 million and announced a $50 million stock repurchase program in March 2025[87] Market and Operations - The company's dredging bid market share represents 27% of a $2375 million market average over the prior three years (2022-2024)[24, 32] - The U S Army Corps of Engineers' budget for 2024 was approved for $8.7 billion, leading to a $2.9 billion U S dredging bid market[33] - The company received notice to proceed in Q2 2025 for dredging work on the Woodside Louisiana LNG project[15] - The company is expanding its core business into the offshore energy industry[22] Fleet and Sustainability - The company is committed to fleet improvement, including new hopper dredges and support equipment[46] - The company is building the first Jones Act compliant, subsea rock installation vessel - Acadia, expected delivery in 2026[46] - The company achieved zero recordable incidents in Q1 2025[64]

Core Insights - Investors prioritize businesses that consistently generate profits, with net profit margin being a crucial metric for assessing profitability and operational effectiveness [1][2] Summary by Sections Net Profit Margin - Net profit margin is calculated as Net Profit divided by Sales multiplied by 100, indicating a company's efficiency in converting sales into actual profits [2] - A higher net profit margin reflects better operational strength and cost management, which is essential for rewarding stakeholders and attracting talent [2] Pros and Cons - Net profit margin provides clarity on a company's business model, including pricing policy and manufacturing efficiency, making it a preferred metric for investors [3] - Limitations include significant variations across industries and complications arising from different accounting treatments, particularly for non-cash expenses [3][4] Winning Strategy - A healthy net profit margin and solid earnings per share (EPS) growth are key elements sought in a business model [5] Screening Parameters - Criteria for screening include a net margin of at least 0%, positive percentage change in EPS, and a high broker rating indicating bullishness on the stock [6][7] Company Highlights - Great Lakes Dredge & Dock Corporation (GLDD) is the largest provider of dredging services in the U.S., with a Zacks Rank of 1 and a VGM Score of A, and its 2025 earnings estimate has been revised upward by $0.27 to $0.96 per share [9][10] - Interface, Inc. (TILE) is the world's largest manufacturer of modular carpets, holding a Zacks Rank of 2 and a VGM Score of A, with its 2025 earnings estimate revised to $1.58 per share [10][11] - Catalyst Pharmaceuticals, Inc. (CPRX) focuses on therapies for rare diseases, carrying a Zacks Rank of 2 and a VGM Score of A, with a recent upward revision of its 2025 earnings estimate to $2.25 per share [11][12] - Sterling Infrastructure, Inc. (STRL) operates in E-Infrastructure and Building Solutions, holding a Zacks Rank of 2 and a VGM Score of B, with its 2025 earnings estimate revised upward by $0.11 to $8.56 per share [13][14]

Market Overview - Wall Street experienced a significant rebound in May, driven by optimism surrounding a potential U.S.-China trade deal, a delay in tariffs on the European Union, and positive developments in broader trade negotiations [1] - The cooling inflation environment, with the core PCE rising only 0.1% in April, is contributing to a more supportive monetary stance from the Federal Reserve, fostering bullish market sentiment [2] Investment Strategy - Investors are encouraged to focus on relative price strength as a strategy to identify outperforming stocks during market uptrends [3][4] - Stocks that have shown better performance than their peers or the industry average, despite strong earnings growth or valuation multiples, should be prioritized [5] Stock Recommendations - Five stocks identified with strong relative price performance over 1, 4, and 12-week periods include: - OppFi Inc. (OPFI) with a market cap of $1.1 billion and a 326% increase in shares over the past year [11][12] - Allient Inc. (ALNT) with a market cap of $534.5 million and a 25% increase in shares over the past year [13][14] - Pagaya Technologies Ltd. (PGY) with a market cap of $1.3 billion and a 43.3% increase in shares over the past year [15][16] - Great Lakes Dredge & Dock Corporation (GLDD) with a market cap of $789.3 million and a 26% increase in shares over the past year [17][18] - NetEase, Inc. (NTES) with a market cap of almost $80 billion and a 35% increase in shares over the past year [18][19] Earnings Estimates - Positive revisions in earnings estimates for Q1 have been noted for all five recommended stocks, indicating potential for further price gains [9][12][14][16][18]

Group 1: Strattec Security (STRT) - Strattec Security designs, develops, manufactures, and markets mechanical and electro-mechanical locks for automotive manufacturers in the US, Canada, and Mexico [1] - The company has a Zacks Rank of 1 (Strong Buy) and a Growth Score of A [2] - The Zacks Consensus Estimate for its current year earnings has increased by 19.9% over the last 60 days [1] Group 2: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, focusing on maintaining and deepening shipping channels, land reclamation, and coastline renourishment [2] - The company also holds a Zacks Rank of 1 and a Growth Score of A [3] - The Zacks Consensus Estimate for its current year earnings has risen by 34.8% over the last 60 days [2] Group 3: The ODP Corporation (ODP) - The ODP Corporation provides business services, products, and digital workplace technology solutions to various business sizes [3] - It carries a Zacks Rank of 1 and has a Growth Score of B [4] - The Zacks Consensus Estimate for its current year earnings has increased by 18.4% over the last 60 days [3]

Company Overview - Great Lakes Dredge & Dock (NASDAQ: GLDD) is the largest dredging company in the U.S. and operates in a niche but critical infrastructure segment [1] Market Position - Despite its leadership position, Great Lakes Dredge & Dock is often overlooked by the market, indicating a potential undervaluation [1] Investment Focus - Stork Research, a private investor, specializes in overlooked and undercovered markets, focusing on micro-cap and small-cap equities that exhibit strong growth at reasonable valuations [1] - The research emphasizes deep, fundamentals-based analysis in sectors such as industrials and technology, which are historically rich in multi-bagger potential [1] Geographic Scope - The investment focus of Stork Research spans the U.S., Canada, and select European markets, including Poland and Germany [1] Investment Strategy - Stork Research typically avoids highly cyclical industries but occasionally targets recovery-phase opportunities or contrarian plays in severely overvalued names where sentiment diverges from long-term value [1]

Group 1: Encompass Health (EHC) - Encompass Health is a provider of integrated healthcare services with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 4.4% over the last 60 days [1] - The company has a PEG ratio of 2.42, which is lower than the industry average of 2.53, and possesses a Growth Score of A [1] Group 2: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, maintaining and deepening shipping channels [2] - The Zacks Consensus Estimate for its current year earnings has increased by 34.8% over the last 60 days [2] - The company has a PEG ratio of 0.98, significantly lower than the industry average of 1.57, and possesses a Growth Score of A [2] Group 3: The ODP Corporation (ODP) - The ODP Corporation provides business services, products, and digital workplace technology solutions to various business sizes [3] - The Zacks Consensus Estimate for its current year earnings has increased by 18.4% over the last 60 days [3] - The company has a PEG ratio of 0.38, which is much lower than the industry average of 3.86, and possesses a Growth Score of B [3]

Market Overview - The U.S. stock market remains strong despite concerns over credit downgrade and fiscal outlook, with major indexes finishing higher due to optimism from U.S.-China trade talks [1] - A temporary 90-day pause in tariffs and an agreement to lower mutual tariffs to 10% have positively influenced market sentiment [1] - The S&P 500 has closed higher in 16 of the past 19 trading days, indicating a strong performance [1] Inflation and Economic Indicators - Easing inflation indicators, with both CPI and PPI showing signs of cooling, have contributed to market buoyancy [2] - Despite Moody's downgrade raising long-term concerns about debt, the focus remains on near-term growth momentum and improving global trade relations [2] Investment Strategy - A relative price strength strategy is recommended, focusing on stocks that outperform the broader market [2][4] - Stocks that are underperforming on fundamental factors should be avoided, while those outperforming their sectors in price should be selected for better returns [5] Stock Recommendations - Recommended stocks based on relative price strength include Great Lakes Dredge & Dock Corporation (GLDD), Sprouts Farmers Market, Inc. (SFM), EverQuote, Inc. (EVER), and Encompass Health Corp. (EHC) [3] Screening Parameters - Stocks should be screened based on relative price change over 12 weeks, 4 weeks, and 1 week, as well as positive current-quarter estimate revisions [8] - Only Zacks Rank 1 (Strong Buy) stocks that have historically outperformed the S&P 500 are considered [9] Company Highlights - **Great Lakes Dredge & Dock Corporation (GLDD)**: Market cap of $760.8 million, with a 34.8% upward revision in 2025 earnings estimates and a 15.6% increase in shares over the past year [11][10] - **Sprouts Farmers Market, Inc. (SFM)**: Unique grocery model with a market cap of $1.5 billion, showing a 35.5% growth in 2025 earnings estimates and a 115.4% increase in shares over the past year [12][13] - **EverQuote, Inc. (EVER)**: Market cap of $867 million, with a 33% growth in 2025 earnings estimates, but shares have decreased by 3.5% in the past year [13][14] - **Encompass Health Corp. (EHC)**: Market cap not specified, with a 13.1% growth in 2025 earnings estimates and a 41.2% increase in shares over the past year [15]

Group 1: Suzano (SUZ) - Suzano is a producer of eucalyptus pulp and paper, holding a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for its current year earnings has increased by 7.8% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 4.28, significantly lower than the industry average of 10.80, and possesses a Value Score of A [1] Group 2: The ODP Corporation (ODP) - The ODP Corporation provides business services, products, and digital workplace technology solutions, also holding a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 9% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 6.17, compared to the industry average of 29.90, and possesses a Value Score of A [2] Group 3: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, also holding a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 34.8% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 11.57, compared to the industry average of 22.30, and possesses a Value Score of A [4]

Financial Data and Key Metrics Changes - The company reported revenues of $242.9 million for Q1 2025, an increase of $44.2 million compared to Q1 2024, marking the second highest revenue quarter in company history [12][6] - Adjusted EBITDA for the quarter was $60.1 million, with an adjusted EBITDA margin of 24.7% [12] - Net income for Q1 2025 was $33.4 million, up from $21 million in the same quarter of the previous year [12][14] - Gross profit increased to $69.5 million with a gross profit margin of 28.6%, compared to $45.6 million and 22.9% in Q1 2024 [12] Business Line Data and Key Metrics Changes - The dredging backlog stood at $1 billion, with capital and coastal protection projects accounting for 95% of this backlog [7] - Over 87% of revenue in Q1 2025 came from capital and coastal protection projects, which typically yield higher margins [12] Market Data and Key Metrics Changes - The company anticipates a normalized bid market of approximately $2 billion for 2025, focusing on coastal protection projects funded by the 2023 Disaster Relief Supplemental Appropriation Act [18] - The visibility of large projects is currently limited due to the ongoing continuing resolution affecting new port deepening projects [32] Company Strategy and Development Direction - The company is focused on executing large and complex projects, leveraging its modernized fleet and strong backlog to maintain high asset utilization [6][19] - A $50 million share repurchase program was approved by the Board of Directors, reflecting confidence in the company's financial performance and long-term outlook [9] - The company is expanding its offshore wind business into international markets, recognizing potential delays in the U.S. offshore wind market [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued support from the U.S. Army Corps of Engineers and the federal government for the dredging industry [17] - The company expects full-year 2025 results to exceed those of 2024, which was the second highest in company history [16] - Management acknowledged a slower start to the year in terms of new port deepening projects but remains confident in the upcoming coastal restoration projects [32] Other Important Information - The company has a robust liquidity position with $11.3 million in cash and an upsized revolving credit facility of $330 million [14] - The newbuild program is expected to be cash flow positive starting in 2026 [15] Q&A Session Summary Question: Inquiry about the Equinor project, Empire Wind One - Management confirmed that the project was fully funded and permitted, and the temporary pause was unexpected. They are in contact with Equinor to clarify the situation [24][25] Question: Market pace of awards given the continuing resolution - Management noted that the year has been slow for new port deepening projects but expects large and complex coastal restoration projects to come out to bid in Q2 and Q3 [32] Question: Competitive environment - Management indicated that the competitive environment remains similar to historical levels, with some dredges taken out of operation and new builds entering the market [37] Question: Dry dock impact on Q1 performance - Management acknowledged that the dry dock for one hopper dredge impacted revenue, but overall project performance on capital jobs drove the strong results [51][60] Question: Future project mix normalization - Management stated that the focus on larger projects is due to the extensive fleet, and they expect continued strong performance in capital and coastal work [66][67]