Tutor Perini (TPC): Catch The Wave While You Still Can

Investing in a stock that is in the middle of an upswing is a tricky proposition. In an ideal scenario, you’d have already set up a position before the rally started. If that train has left the station, you’re left with a conundrum — go in and expose yourself to the risk of a reversal, or stay put and potentially leave a lot of gains on the table.

Here’s a case where you may still be able to catch the wave…

Tutor Perini (NYSE: TPC) is a California-based construction company that has been in business since 1894. While it’s not a household name, the company has quietly managed to grow to a pretty hefty $3.37 billion valuation at that time.

TPC shares have rallied by 49.72% over the past three months. On a year-to-date (YTD) basis, the stock has rallied by 164.74%. For the sake of reference, the S&P 500 has surged by a decent, yet comparatively meager 12.20%.

So — why should you pay attention to TPC? Because there is a good chance that the stock still has more room to run. 

Here’s why…

First things first — our quant rating system, Zen Ratings, shows a high degree of confidence in Tutor Perini. The system keeps track of roughly 4,600 stocks, and evaluates them by using 115 factors divided into 7 categories called Component Grade ratings. Stocks that rank in the top 5% are given a Zen Rating of A — and per backtesting, they’ve provided an average annual return of 32.52% since the early 2000s.

At present, TPC ranks 27th overall on that 4,600-stock strong list — in the top 1%, so it wouldn’t be unfair to call it the cream of the crop.

Let’s dig into what makes it so great. For one, it stacks up great against rivals and peers — as it is currently the top-rated stock in the Engineering & Construction industry, which has an Industry Rating of A.

Alright — now, let’s dig into the specifics by taking a closer look at those Component Grade ratings.

We’ve already mentioned the amazing run the stock has been on — the 164.74% YTD return places Tutor Perini firmly in the top 4% of equities in terms of Momentum. 

However, that isn’t even its strongest Component Grade rating — that title belongs to Growth, a category that takes into account sales acceleration, EPS growth, and margin improvement, along with a few more factors. Looking at Growth, TPC ranks in the top 1% of stocks.

However, it’s important to note that, when it comes to Component Grades, a vast majority of B ratings (and even some C ratings) represent good scores. For instance, Tutor Perini might have a B rating when it comes to Safety — but it ranks in the top 12% in this regard.

The same can be said of TPC’s Artificial Intelligence rating. Tutor Perini ranks in the 85th percentile of stocks when it comes to AI — moreover, it’s also one of the 7 stocks in our exclusive Zen Strategies AI Factor portfolio, which has an all-time annual return of 48.01%.

Here’s the long and short of it — in its last quarterly report, the company posted earnings per share (EPS) of $1.41, whereas estimates were pegged at just $0.29. That report also contained a bevy of positive developments — record-breaking cash flow for a year’s first half, a record-breaking backlog, and plenty of new high-margin and long-term projects. To top it all off, this was the second quarter in a row in which management increased earnings guidance.

The last point in TPC’s favor is a technical one — the stock is currently trading at $63.96, within striking distance ofc its 52-week high of $65. If it manages to mount a successful breach of resistance, the stock could very well see another rapid upswing sooner rather than later.

—> Click here to research TPC. You might also want to check out our Zen Strategies AI Factor Portfolio.

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