#2 - Advanced Drainage Systems (NYSE:WMS)
The next stock to consider is Advanced Drainage Systems (NYSE:WMS). Put simply, Advanced Drainage Systems supplies the industrial-grade “plumbing supplies” that assist in the building and construction industries. This has been one of the strongest performing categories since the country began re-opening.
WMS stock is up 60% for 2020 and is up 166% since closing its pandemic low of $23.59 on March 23. However, the stock is down over 10% since the presidential election. Part of the reason may be that, while the company beat revenue estimates, its bottom line below analysts’ estimates.
But that would seem to be short-sighted. After all, the company’s financials remain strong. For example, its free cash flow (FCF) sits at $257 million, which is nearly 100% higher than the $135 million of FCF it had at the same point in the fiscal year 2020. On the conference call for the company’s earnings report, management cited a 2% decrease in working capital as one reason for the increase in FCF.
What seems more likely is that the market is factoring in the possibility of more harsh mitigation efforts to contain the novel coronavirus.
About Advanced Drainage Systems
Advanced Drainage Systems, Inc designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators.
Read More - Current Price
- $130.48
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 6 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $170.29 (30.5% Upside)
