Housing-MarketTomahawk, WI 3/28/2013 (Expedated) – As the housing market heats up the construction business should follow suit, but getting to big for your britches is often times a problem. In our downward mover of the morning we take a look at just such a company.

Goldfield Corporation (GV) is down over 11% as we head into the afternoon session. Goldfield is an electrical construction and real estate development company with its main offices in Florida.

As most building companies were scratching for work Goldfield has been on a roll in 2012 reporting record results with $81.6 million in revenues and $12.0 million in net income. Almost all of this revenue came from GV’s electrical construction segment which accounted for 99% of its 2012 revenues.

The most important thing for the company is to continue to secure contacts and work. One of the reasons that this may be in doubt at the moment is that the company’s current backlog figure sits at just over $40 million which is almost a 50% decrease since February 27, 2012. This declining backlog reflects the completion of outstanding work and the lack of securing more work. This is never a good thing and investors have taken notice as the stock price has plummeted 18% during this month. And, it continues to fall today.

Now there still are a few positives to look at here,  the company’s current assets-to-liabilities ratio is 2.6, and the company has close to $19 million in working capital with over $7 million in cash, which is pretty good.

So has the stock just made a correction to a more reasonable price or will it continue to slide? The ability to secure future projects and get them done in a timely fashion will be the key, so stay tuned.

Disclaimer: This article is intended for informational and entertainment use only, and should not be construed as professional investment advice. They are my opinions only. Trading stocks is risky — always be sure to know and understand your risk tolerance. You can incur substantial financial losses in any trade or investment. Always do your own due diligence before buying and selling any stock, and/or consult with a licensed financial adviser.

 

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