William Harnisch’s Peconic Partners’s Top Picks Include Regal Entertainment Group (RGC)

Another construction related stock in Peconic’s portfolio was Dycom Industries, Inc. (NYSE:DY), though it mainly serves telecom and TV providers. In its most recent quarter revenue rose by 48% compared to the same period in the previous fiscal year, but due to higher costs the company ended up recording a decline in net income. Analysts expect the company to recover, however, and apparently to begin converting the higher revenue numbers into profits: they have the stock at a forward P/E of 17 and a five-year PEG ratio well below 1.

Harnisch and his team increased their stake in Flotek Industries Inc (NYSE:FTK) by 30% between January and March to a total of 2.5 million shares. Flotek provides chemicals and equipment used for oil and gas companies for drilling. It’s another stock which has more than doubled in the last year, though it appears to be encountering challenges: revenue has leveled off over the last year, according to recent reports. Even with a trailing P/E of 19, we’re interested enough in the industry that we’d be interested in learning more about Flotek.

Mastec certainly has high enough expectations for growth that we would want to take a closer look at that company as well, and we’re also curious as to why Quanta wouldn’t be doing as well since it is in a similar business and that company’s financial performance has been good. Dycom is a tougher call: there, analysts are bullish but we would prefer to wait until the company has shown that it can grow its revenue without hurting its margins as much as it has recently. As for Regal Entertainment Group (NYSE:RGC), the dividend yield is certainly high but again the weakness of its recent business conditions would probably be enough for most income investors to stay away.

Disclosure: I own no shares of any stocks mentioned in this article.