Granite Construction (GVA- $27.67 - NYSE) (GVA, Financial) provides construction and infrastructure solutions for the Transportation, Water, and Materials sectors. This marks the second quarter in a row that Granite is one of our bottom contributors as its struggle with large, legacy, fixed-priced projects continued. This was a surprise to us (and the market) given the confidence that management had expressed heading into the quarter that no additional write-downs were anticipated. This confidence was premature as management announced on the earnings call that a write-down was required once again sending shares down 28% on the day. Management is finally taking steps to fix this segment by changing management and strategy surrounding future project bidding including limiting project size. While these changes are welcomed, the lack of full resolution of these troubled projects, as well as management’s inability to consistently forecast near-term business trends caused us to move on.
From Keeley Asset Management's Small Cap Dividend Value Fund fourth-quarter shareholder commentary.
