Section1: Company Overview and Fundamental Insights:

1.1 Company Overview:

North American Construction Group Ltd. (TSX: NOA) is a Canada-based company that provides a range of mining and heavy construction services to customers in the resource development and industrial construction sectors in Canada, the United States and Australia. The Company's operating divisions include Heavy Construction and Mining, and Equipment Maintenance Services. 

Kalkine’s REIT Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders together form ~53.42% of the total shareholding. Mawer Investment Management Ltd. and Ferron (Martin R) hold a maximum stake in the company at ~­­­10.20% and ~7.60%, respectively.

1.4 Key Metrics:

The company’s revenue and gross profit increased in Q1 2024 against Q1 2023, which is a key positive. In addition, the firm is witnessing higher margins, which let the business show its strength and flexibility by producing sufficient Adjusted EBITDA and elevated combined backlog.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates: The below picture gives an overview of the company’s recent activities, such as the announcement regarding a rise in net debt and dividend distribution.

2.2 Insights of Q1 2024 Financial Performance:

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

The stock has witnessed a downside of ~4.14% and an upside of ~2.47% over the last 1 week and 1 month respectively. Moreover, the stock is trading below the average of 52-week high price of CAD 34.87 and 52-week low price of CAD 24.18 providing an opportunity to accumulate the stock.

4.2 Fundamental Valuation

Valuation Methodology: EV to Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 17, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.  

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.