Great Lakes Dredge & Dock Corporation (GLDD) is a play on the stimulus plan as the largest provider of dredging services in the United States is seeing more active bids from the Army Corps of Engineers.

In the first six months of the year, the company saw a 40% increase in dredging operations revenues. The domestic bid market’s second quarter activity also almost doubled from the first quarter and rose 30% from 2008’s first half. In August, Great Lakes viewed this as a positive sign for the domestic market for the rest of 2009 and into 2010.

Due to the up tick in activity levels in the domestic market and a slowdown in the Middle East, the company re-positioned two hydraulic dredges back to the United States.

Great Lakes is expected to report third quarter results on Nov 3. Analysts have been holding at 4 cents a share over the last 90 days. The full year Zacks Consensus Estimate, however, has risen 2 cents to 37 cents in the last 60 days.

The company is coming off of two big earnings surprises in the first and second quarters of 550% and 85.71%. Analysts expect huge earnings growth this year of 315.56%.

Value Fundamentals

Since I last reviewed Great Lakes on May 20, the stock has gotten more expensive. In May it was trading at 13.6x forward estimates and now is at 17.75x. The price-to-book ratio is 1.59. The company also pays a dividend with a current yield of 1.00%. Great Lakes is a Zacks #2 Rank (buy) stock.

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