) gained 4.5% after its unit, Insituform Technologies, LLC, won a
contract from the Metropolitan St. Louis Sewer District (MSD),
worth around $5.2 million on Jan 15. As per the deal, Insituform
will provide rehabilitation with Cured-in-Place Pipe (CIPP). The
stock closed at $22.22 at the end of trading on Jan 17.
Insituform, a global leader in the development and installation
of proprietary technologies and services for repairing sewer,
water and other underground piping systems, will use its CIPP
technology for the rebuilding of over 25 miles of small and
medium diameter pipelines throughout the city.
Including this contract, Aegion has secured contracts to the tune
of around $22 million from MSD. The project is expected to begin
in Jan 2014 and will be complete after 12 months. Aegion is
engaging best-in-class project management to ensure consistency
in the execution of all the projects.
In addition, North America's CIPP market grew by around 20% in
2013 largely from a recovery in the U.S. market. In North
America, Aegion reported 23% year-over-year revenue growth in the
third quarter of 2013 driven by improved backlog and a shift to
larger diameter projects.
Aegion will benefit from its strong backlog as of third
quarter-end. Furthermore, the company's contract wins in the past
as well as its scope to gain more such deals in the future bode
well for the company.
Aegion is taking steps to enhance the sales organization to
properly resource and align the organization in its primary end
markets, namely pipelines, buildings and transportation. These
efforts are expected to lead to improved sales acquisitions and
project execution in 2014.
Chesterfield, Missouri-based Aegion is a diversified building and
construction company, which provides infrastructure protection,
proprietary technologies and facilities. It also offers services
related to the reconstruction and improvement of sewer, water,
energy and mining piping systems.
Currently, Aegion carries a Zacks Rank #5 (Strong Sell). However,
some better-ranked stocks in the sector include
United Rentals, Inc.
Chicago Bridge & Iron Co. N.V.
). All of these have a Zacks Rank #2 (Buy).
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