From a recent Mad Money show: "GVA is a great speculative play on infrastructure. It's had a monster run, so expect a sell-off. I'd rather own Caterpillar (CAT) though."

Mad About Options: Jumping on JPM: The Mad About Options crew reviews Jim Cramer's recent bullish comments about JPMorgan Chase and offers options strategies for traders and investors. Also hear options ideas for Granite Construction and Bristol-Myers Squibb.
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growth

Fitzpatrick said that Granite Construction (GVA) is trading above its 50-day moving average and making higher lows. He said investors should watch for a breakout above $40.

From a recent Mad Money show:

"You sell that sucker. It's had a little spike here. You ring the register and sell."

Beneficiary of California highway spending over next 3 years

#56

P/E is 27.8, the PEG is 1.7, and the yield is 0.7%.

POSSIBLE MOVE TO UPSIDE ALONG WITH OTHERS IN THIS GROUP

From Barron's 7-23-07:

"Third Point raised its position to 4,000,000 shares (9.5%) by buying 1,239,700 from June 29 to July 16 at prices that ranged from $64.18 to $73.70 apiece."

The last paragraph should read "short in the mid $50s and cover at or below $50."

Granite Construction (GVA) - Building Long Term Value

I've been getting a lot of emails asking me why I hate Granite Construction. The truth is...I don't.

It seems like it should be the perfect storm for Granite Construction (GVA). Lower gas prices translate into more driving which translate into more roads and road improvements. Lower gas prices and more driving also translate into more gas taxes collected for states and municipalities to improve roads. Granite Construction admitted in a September 20 press release that its Branch division is booming with public sector bidding opportunities and I expect that updraft to continue.

Then why am I constantly hammering the stock to short at high prices and then buy it back?

Most of my analysis has been technical for Granite Construction, but there are some fundamental short term issues to look at as well. Don't get me wrong, I think Granite Construction has a decent long term story, with project backlogs and plenty more business coming. But there are some fundamental details that lend to trade this stock in a range until it can break through its record high at $56.14.

1. Insider Buying and Selling

Checking the insider buying and selling in the stock, it appears that the insiders follow a pattern - buy between $42 and $47 and then sell over $50. That does not bode well for the stock breaking through its record high of $56.14 until that stock activity pattern is broken. That's why I suggested shorting the stock in the mid $50s and buying it back at or below $50. That's a quick 10% gain while the pattern continues.

2. October 25 Earnings

The company already affirmed that 2006 earnings will be stronger than record 2005 earnings and the Heavy Construction division is dragging on earnings. The news is out on the stock until at least the October 25 earnings call. There's not much out there to move the stock out of the range until then.

3. Already Up Big in 2006

The stock is already up more than 40% percent in the last 52-weeks, meaning the stock really doesn't have much more to run.

Don't get me wrong, the fundamental story and economic indicators are pointing towards a decent long term future for Granite Construction. I just think investors are better off playing the price range of buy in the mid $50s and sell at or below $50 until the stock can break through to new highs or some new news gives the stock somewhere to go.

See, I wasn't just picking on Granite Construction...

Goleta Capital
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