This article will use NV5 Global, Inc. (NASDAQ: NVEE) as an illustration of our continued search for the most likely identification of near-term capital gain prospects and their potential capital loss risks.
We employ behavioral analysis identify the outlook for gain and loss for individual securities over predictable time horizons of several months rather than the several years normally previously used in 20th century valuations.
If you are new to this analysis, please temporarily explore this brief explanation.
Active investment in infrastructure construction stocks
Company description, growth prospects
“NV5 Global provides professional and technical engineering and consulting solutions to public and private sector clients in the infrastructure, utilities, construction, real estate and environmental markets in the United States and internationally. It operates through three segments: Infrastructure; Buildings, Technology & Science; and Geospatial Solutions. The company was formerly known as NV5 Holdings, Inc. and changed its name to NV5 Global, Inc. in December 2015. NV5 Global, Inc. was founded in 1949 and is headquartered in Hollywood, Florida.
Source: Yahoo Finance
Infrastructure construction services Stocks at present are good vehicles for active investing, as a recognized deficiency in national maintenance is the target of public spending programs to avert recent tragic failures of highways, bridges and public buildings. The era of information technology continues to demand these activities with ever-increasing capabilities for technology capability and public mobility demands.
Setbacks and intermediate failures keep opportunity valuations in flux among many companies. Physical development timelines and marketing efforts under government regulations and peer review progress vary from country to country. Competitive pressures from burgeoning successes of new organizations can impact established businesses.
The investment result is that there is far more price-changing activity for short-term capital gains and losses than can be gained with the “long-term growth and income” strategies of the Twentieth century. What is needed to seize opportunities and minimize losses is a demonstrated stock-by-stock outlook of the expected market price range today and in the near future. The type we find in the behavior of commercial transactions in volume.
Thus, we have specific, honest and unbiased predictions of future price limits, both up and down, driven by self-serving competing interests of participants in open market trading.
These limits can help define potential investment reward and risk on an issue-by-issue basis that is directly comparable between alternatives, regardless of their underlying competitive or economic circumstances. These essential details were subsumed in the hedging negotiations.
Figure 1 uses these predictions to make Risk and Reward price comparisons between alternative investments.
(used with permission)
Each stock is positioned on this chart by its intersection of typical upside price change forecasts (on the green horizontal scale) and downside price exposures (on the red vertical scale) after past forecasts like that of today. Any issue above the dotted diagonal has more potential risk than reward at its current price.
A market benchmark by SPDR S&P 500 Trust ETF (SPY) is at the location . Notably, none of the marketing services stocks have less downside risk than SPY, but most of them have higher return prospects. The most expedient, on a reward-risk basis, is  NVEE.
Since price change risk is a dynamic and not a constant, these exposure relationships will change over time. It is these changes that provide new opportunities for active investment capital gains on a recurring, shorter-term basis. Besides downside price exposure, there may be other investment attributes that investors will want to consider. Figure 2 shows some of them.
(used with permission)
Column price range prediction limits [B] and [C] be defined by MM’s hedging actions to protect the firm’s capital which must be exposed to the risk of price changes from volume trade orders placed by large $”institutional” clients.
[E] measures the potential upside risks for the short MM positions created to fill these orders and rewards the potentials for the buy positions thus created. Past forecasts like this provide a history of relevant risk of lower prices for buyers. The most severe actually encountered are found in [F]during the periods of maintenance in the effort to reach [E] earnings. This is where buyers are most likely to accept losses.
[H] indicates what proportion of the [L] sample of similar past predictions made gains by causing the price to reach its [B] target or be above sound [D] cost of entry at the end of a maximum holding period limit of 3 months.
[ I ] gives the net gains-losses of those [L] experiences and [N] suggests how much [E] can be compared to [ I ].
Other reward-risk trade-offs involve the use of [H] win odds with loss odds 100 – H as weights for N-conditioned [E] and for [F]for a combined yield score [Q]. The typical job retention period [J] on [Q] provides a symbol of merit [fom] ranking measure [R] useful in portfolio position preference. Figure 2 is ranked on R among candidate titles, with TTGT ranked first.
For perspective, along with candidate-specific stocks, these selection considerations are provided for the averages of over 3,300 stocks for which MM price range predictions are available today. Top 20 ranked (by of) of these forecasts, and the forecast for the S&P500 Index ETF as a proxy for the stock market can also be noted.
The 52 bps/day outlook of NVEE when compounded over a year of 252 market days, adds to the 320% gain in [K] if maintained for one year. But its high price target over the next 3 months of $133.91 at +22% above the current expected price of $110 leaves the remaining +295% to be made up of other select investments capable of making gains at same rate of 52 bp/day in the remaining 216 market days of the year, if it takes the previous average of 31 days to gain that +22%.
All of these ifs are what make it easy to track scores by simply adding up the base points achieved and the days it takes to achieve them, then dividing them by each other to get an average CAGR for your portfolio.
Among the top 20 of today’s 3,203 MM price range predictions, their high win odds (87 out of 100) and short holding periods (36 days) drive their average CAGR to 240%. Here, NVEE compares quite favorably at +323%, in contrast to MM’s predicted population CAGR of 22% and SPY at +57%.
Recent Trends in NVEE Price Range Predictions
Figure 3 shows the daily forecast of the MM hedging implied price range for the past 2 years as vertical lines. Unlike the “technical analysis charts” only of past prices these are forward-looking expectations prizes yet to come in the coming months. These are weekly selections of forecasts made daily over the past two years.
Each forecast is divided into upside and downside price change prospects by the big dot of the stock market’s closing price on the day the forecast was made. They are records of direct expressions of what is reasonably expected and where capital has been put at risk, not hypothetical hopes of past price repeats.
(used with permission)
The small image at the bottom of Figure 3 shows the daily record for the past 5 years of where market quotes divide each forecast into up and down proportions. The current Range Index of 3 indicates that less than one-twentieth of the full forecast range is down, and more than 19-twentieths is up. Typical NVEE valuations have averaged much higher than the current outlook, an indication of a likely higher price.
The above comparison of NV5 Global, Inc. with its top competitors indicates that a purchase of the stock at this time should provide capital gain satisfactions in the coming months..