Do You Think Dycom Industries (DY) is Trading at a Discount?

Do You Think Dycom Industries (DY) is Trading at a Discount?

Fri, September 18, 2026 at 3:52 PM GMT+3 3 min read

• DY +2.21%

Reaves W H & Co Inc's second-quarter 2026 investor letter reports a 10.55% increase for its "Reaves Long Term Value Wrap Strategy," outperforming the MSCI USA Infrastructure Index's 6.31% decline. The letter can be downloaded here. Cash distributions grew 6.7% in the quarter compared to Q2 2025. Despite geopolitical uncertainty, investor sentiment remained strong. AI expansion benefits companies in construction, connectivity, and infrastructure, especially in utility, communication, engineering, electrical, and power sectors. The strategy's performance benefited from investments across the AI infrastructure ecosystem and support for physical infrastructure supporting AI at scale. Although risks persist, the long-term investment case for many companies remains strong, positioning the strategy for durable growth, increasing dividends, and attractive long-term returns. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its second-quarter 2026 investor letter, Reaves Long Term Value Wrap Strategy highlighted Dycom Industries, Inc. (NYSE:DY). Dycom Industries, Inc. (NYSE:DY) is a leading infrastructure services company, providing services to the digital infrastructure, telecommunications infrastructure, and utility industries, and contributed positively to the fund's performance this quarter. On September 17, 2026, Dycom Industries, Inc. (NYSE:DY) closed at $285.49 per share. Over the past month, Dycom Industries, Inc. (NYSE:DY) declined 27.35%, but its shares are up 5.90% over the past year. Dycom Industries, Inc. (NYSE:DY) has a market capitalization of $8.61 billion, and its stock has traded within a 52-week range of $266.09 and $566.47.

Reaves Long Term Value Wrap Strategy stated the following regarding Dycom Industries, Inc. (NYSE:DY) in its Q2 2026 investor letter:

"Dycom Industries, Inc. (NYSE:DY): Dycom Industries produced an exceptionally strong quarter that came in well ahead of expectations. This was accompanied by compelling forward demand indicators, including a backlog up 25% sequentially, a 2.2x book-to-bill ratio, and robust guidance. Demand for fiber to-the-home deployments continues to be strong, and diversification into middle-mile and data center projects (both fiber and electric) are enhancing revenue growth and margins. We continue to think the stock appears cheap relative to peers."

Dycom Industries, Inc. (NYSE:DY) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 68 hedge fund portfolios held Dycom Industries, Inc. (NYSE:DY) at the end of the second quarter, up from 52 in the previous quarter. While we acknowledge the potential of Dycom Industries, Inc. (NYSE:DY) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed Dycom Industries, Inc. (NYSE:DY) and noted that although the company reported a 46% surge in revenue, acquisition accounted for majority of the gain, questions remain regarding the strength of core organic performance. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

This article is originally published at Insider Monkey.