Badger Infrastructure Solutions Ltd T.BDGI

Ink Research

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Morning Report: Contrarian alert: Insiders buy as Badger Infrastructure stock slides

May 29, 2024

Badger Infrastructure Solutions (BDGI) stock is up more than 50% over the past 12 months, but it has been pulling back since it hit a 52-week high of $51.50 on March 26th. On May 28th, the stock closed at $41.80, not far off its 200-day moving average of $41.47. CEO Robert Blackadar was buying near the highs, while CFO Robert Dawson waited to pick up shares at lower prices this month.

Badger provides specialized excavating services across a range of industries including general construction. The company designs and manufactures all of its hydrovac units at its plant in Red Deer Alberta. In Q1, Badger reported revenue of $161.6 million, up 13% from the same period in 2023. The boost was driven by its US business. While net earnings per basic and diluted share fell to $0.05 from $0.08 a year earlier, Cash flow from operations before working capital and other adjustments per basic and diluted share (a non-GAAP term) rose to $0.85 from $0.70. Adjustments are itemized in the Q1 unaudited interim condensed consolidated statement of cash flows. When Badger published its Q1 results on May 1st, it gave an upbeat outlook on its business for 2024. It said, "we expect to see continued strong and growing demand in our end markets". It also said, "the slowdown we have experienced in Canada is attributed to the delay of several projects, which are currently expected to begin in the back end of 2024, and into early 2025." Given their company's optimism, it is encouraging to see insiders backing those statements up with some public market buying.