Orion Marine Group, Inc. (ORN) is a provider of marine construction services on, over and under the water along the Gulf Coast, the Atlantic Seaboard, the West Coast of the United States as well as Canada and the Caribbean Basin. The company currently trades for about $212 million relative to book value of $238 million ($205 million tangible), average operating income for the past two years of $32.3 million. It has zero debt and $35 million in cash and equivalents. Moreover, it has generated average ROE and ROIC of 15% over the last six years while growing revenues at 18% CAGR from 2004 to the end of fiscal 2010.
Growing revenues and respectable returns over a business cycle that encompasses a peak and (hopefully) a trough would normally indicate a business that should be trading at a P/B of at least 1. Perhaps the following chart provides an explanation:
Orion Marine Group, Inc - Historical Revenues and Margins, 2004 - 3Q 2011.