EMCOR Group (EME)

A lot of industrials have traded off along with the AI trade. Investor wariness about hyperscalers trickles down to derivatives of AI, and EME is one of those. Over the long term, will be a participant and will grow.

Not a pure play on AI and data centre buildout, but benefits. Primarily a US domestic business. Stalwart grower for long periods of time; compound earnings over last decade at high teens pace. Undemanding multiple of ~20x PE, similar to peers. Dip is buyable.

Had a really big move higher. Then over the course of June-July and the last couple of weeks, momentum areas of the market have really come under pressure. So it's broader momentum selling. Oversold, so he doesn't mind nibbling here.

Overall, concerned about the lower highs and lower lows. If it can clear ~$860-875, he'd add then.

Looks interesting on this pullback. Hit with broader concerns about hardware, but it's actually really well positioned and should benefit from the broader trend. Business model is riskier, so she doesn't own.

(Note the short timeframe.)  Still a massive shortage of data centres. Strong backlog, so revenue stream is predictable. Pricing power is leading to margin improvement.

Building of data centres will grow 23% this year as tech companies race to build them. EME is in construction, specializing in mechenical and engineering systems (HVAC, plumbing).  Revenues are up, $25 EPS and trading at 25x PE, a little high, but they outperform and buyback shares.

This is essentially a construction company and has done very well over the past ten years. It has morphed into data centres but the overall infrastructure play is still very much in effect with much more spending needed from the US government, eg. airports. It continues to perform and has consistently outperformed consensus in the past 19 quarters. Trades at 23X earnings with revenue up 17% in the past year. It is in their small cap portfolio.
Buy 6  Hold 3  Sell 0 

Has held this for a very long time.

He particularly likes the infrastructure space, and this name is involved with that.

Is up 36% this year, thanks to growth in data centres. Trades at only 23x 2026 PE. Will join the S&P this month.

Involved in data centres and the infrastucture. Has a lower PE than APH, but the stock has moved a lot. A good company.

He owns EME instead of Quanta Services. On a 5-year chart, PWR has outperformed. But on a 1-year chart, EME is ahead. At 28x earnings, the multiple on PWR is about 50% higher than its normalized range, so it's not as good a value today. He'd switch into EME. EME has better profitability metrics, EPS revisions are better, PE is 20x earnings.