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Dycom (DY) Rises 104% in 6 Months: Will the Rally Continue?

Dycom (DY) Rises 104% in 6 Months: Will the Rally Continue?

Dycom Industries Inc. DY has been riding high on strong prospects in the telecommunication business, continuous contract wins and solid backlog. Earnings estimates for fiscal 2021 and 2022 have moved 6.4% and 0.9% north in the past 30 days, depicting bullish analysts’ sentiments.

Shares of this specialty contracting firm have rallied 104.1% over the past six months, outperforming the Zacks Building Products – Heavy Construction industry’s 26.9% growth.

This Zacks Rank #1 (Strong Buy) stock has also outperformed the Zacks Construction sector and S&P 500 Index’s 47.7% and 22.9% rally, respectively, in the said time frame. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Factors Narrating Dycom’s Growth Story

Strong Prospects in Telecommunication Business: Accounting for 90.8% of contract revenues, Dycom’s Telecommunication business primarily benefits from increased demand for network bandwidth and mobile broadband, given the proliferation of smart phones. As telecommunication networks face increased demand, customers need to expand the capacity and improve the performance of existing networks and in certain instances, deploy new networks. Presently, a number of major industry participants are deploying significant wireline networks to offer bandwidth-enabling 1-gigabit speeds, thereby creating significant opportunities for Dycom.

In the last few quarters, the company’s top line benefited immensely from extensive deployment of 1-gigabit wireline networks by major customers. Dycom remains optimistic about the strengthening industry environment, given strong end-market drivers. Although the recent market trend is a concern, telecommunication networks that are a crucial infrastructure for the country will gain momentum as the effects of the pandemic phase out.

Solid Backlog: Dycom continues to register a stable 12-month backlog despite a challenging economic backdrop. This indicates persistent growth through the next calendar year. The company recorded backlog of $6.441 billion at the end of second-quarter fiscal 2021, almost in line sequentially. Of

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Stock futures open slightly higher after stimulus hopes fuel rally

Stock futures open slightly higher after stimulus hopes fuel rally

Stock futures traded slightly higher as the overnight session kicked off, after the three major indices closed at their highest levels in more than one month earlier in the day.

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Traders clung to hope that some aid out of Washington – if not a multi-trillion dollar, comprehensive virus relief package – might transpire in the near-term.

House Speaker Nancy Pelosi said Wednesday that she would be open to passing a bill to provide relief to airlines specifically, after President Donald Trump said late Tuesday that he would approve piecemeal measures including airline aid.

However, Pelosi also signaled that she would not be open to advancing a bill that would authorize another round of $1,200 direct checks to taxpayers, saying that that on its own would be insufficient to address the Covid-19 crisis. House Democrats last week voted to advance a larger package to inject another $2.2 trillion in aid to various parts of the economy.

Airline stocks, along with travel and leisure names, were flat to slightly higher in late trading, largely holding onto gains from the regular session Wednesday.

“It’s been the question of the day, as to why we got the tweets we got over the last 24 hours, the market reaction we got into [Tuesday’s] close, and then the rally today,” Ed Mills, Raymond James Washington policy analyst, told Yahoo Finance Wednesday afternoon.

“Investors I’ve spoken to at Raymond James have been mixed. Some believe that this makes it much more likely that regardless of the outcome of the election, there’s a deal to be had in the lame duck [session] before the Dec. 11 deadline to funding the government,” he added. “Others said this is a clear signal from the market that they are now expecting a Democratic sweep. That would be the package

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