Stock price when the opinion was issued
A large E&C firm, very global in nature. For many years, their execution was very good. Has gotten more interested in this, because by being highly diversified, they can tackle the largest and most complicated projects globally. Their challenges are twofold. They are market driven. As an example, their mining backlog has fallen by over 90%. It is cyclical, and is much closer to the bottom that it is to the top. Secondly, they’ve made mistakes with some really shoddy execution in some areas. Dividend yield of 2.1%. (Analysts’ price target is $46.50.)
An engineering company. Has been looking at this for the last few years. He passed on it because about half their business is very much tied to the energy industry. They work on a lot of huge mega projects. Energy prices being low has negatively impacted them. The company has massively missed their guidance continuously, for the last couple of years, including their most recent quarterly earnings. Their backlog is declining. The dividend is probably secure.
The political risk is prevalent across the industry, as we saw with SNC. There are better opportunities. The business is highly cyclical and subject to government policies. He would stay away, but it is a high quality company in the space.
re: Biden infrastrcture plan FLR would benefit from Biden's plan, but FLR wouldn't be his first choice. They've had 3 CEOs in the last 2 years and were the subject of an SEC investigation and had to delay their financial statements. They're getting rid of Stock, a subsidiary. Lots of moving parts here. United Rentals, SNC Lavalin and Jacobs Engineering are better.
Had a bit of a speed bump a couple years ago with quick CEO successions. Last couple of years have been good. Last earnings report was not great. Revenues missed. Could be due to project decisions were put on hold for the elections due to uncertainty. Watching to make sure it gets back on track. Some concerns but it is a good quality company.
Owned this in the past. A global engineering/construction company that is very diversified geographically. Very well-run. She got out because of their end markets in terms of energy and mining, which were in a downturn. When things are stabilizing and improving, this could be a name that she could enter.