Why the Cimic share price jumped at yesterday's close

The Cimic Group Ltd (ASX: CIM) share price is one to watch tomorrow after a 0.72% surge in 20 minutes at yesterday's market close.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Cimic Group Ltd (ASX: CIM) share price jumped 0.72% higher in the last 20 minutes of yesterday's trade, but why?

Why did the Cimic share price jump yesterday?

Cimic's update about its wholly-owned subsidiary CPB Contractors was the big news yesterday.

CPB Contractors reached contractual close to deliver the Yanchep Rail Extension (YRE) and Thornlie to Cockburn Link (TCL) components of Perth's METRONET project.

The contract will be delivered with Downer EDI Limited (ASX: DOW) and generate $423 million in revenue for CPB Contractors.

The YRE involves the construction of 3 new stations while the TCL connects 2 existing lines with the construction of 2 new stations.

The Cimic share price jumped as we headed towards the ASX close yesterday, climbing 0.72% higher after the 3:46pm announcement.

That late move dragged the group's shares back into the positive for the day to close 0.63% higher at $34.95 per share.

How did the rest of the ASX 200 perform?

It was somewhat of a mixed bag for the ASX 200 yesterday.

The S&P/ASX 200 Index (INDEXASX: XJO) edged 0.035% lower to close at 6,847.30 points yesterday.

Shares in Cimic's METRONET partner Downer EDI slumped 1.07% lower to $8.32 per share. Still, Downer shares have had a considerably better year than Cimic in 2019.

The Cimic share price has plummeted 18.28% lower this year compared to the ASX 200's 23.20% gains.

In contrast, Downer shares are marginally outperforming this year, having climbed 24.55% higher.

Cimic does offer arguably better relative value and trades at 14.45 times earnings. Downer's price-to-earnings ratio is 19.68 times, while the Downer dividend (3.37% per annum) is also lower than CIMIC's 4.49% per annum.

Foolish takeaway

The CIMIC share price jumped higher yesterday afternoon but I'd keep an eye on it this morning too.

Given the 20-minute window investors had to react to the news, we could see some carry over into trade today.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Share Gainers

3 ASX All Ords shares up 50%+ in March

These ASX shares have been on fire this month. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Share Gainers

Why Mesoblast, Patriot Battery Metals, Sigma, and Zip shares are pushing higher

These shares are having a good session on hump day. But why?

Read more »

Woman looks amazed and shocked as she looks at her laptop.
Consumer Staples & Discretionary Shares

If you'd put $20,000 in this ASX retail stock at the start of 2023, you'd have $134,000 now

This online retailer has executed a remarkable turnaround for its investors.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was back to earth for ASX shares this Tuesday.

Read more »