Long Position on WMS @ $59.00 on 8/20/2020 (Momentum)

Advanced Drainage Systems, Inc. (WMS) designs, manufactures, and markets thermoplastic corrugated pipes and related water management products, and drainage solutions for use in the underground construction and infrastructure marketplace in the United States, Canada, and internationally.

The company offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators.

It also purchases and distributes construction fabrics and other geotextile products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products.

The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of approximately 32 distribution centers in approximately 80 countries. 

Advanced Drainage Systems, Inc. reported 1st Quarter June 2020 earnings of $0.83 per share on revenue of $508.6 million. The consensus earnings estimate was $0.65 per share on revenue of $510.4 million. Revenue grew 22.9% on a year-over-year basis.

Following its strong earnings report, shares have formed a "bullish cup and handle". We expect shares to move higher out of this formation.

Entry Point: $59.00

Trading Range: $22.13 - $61.65

Stop Loss: $56.00

Target Price: $65.00

Updates

9/28/2020 11:21:37 AM

WMS closed at $61.50.

Position closed on 9/28/2020 at price of $61.27 with a 3.85% gain in 39 days.

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