Fluor Corp. (FLR)

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.)

The largest engineering/construction company in the world. If he wanted to own an engineering company, he would be looking at the Canadian ones, because the valuations are very good. At some point, there will be massive spending on engineering in Canada, and he would rather go that route. Prefers Stantec (STN-T).

This has corrected, so he is tempted. It closed at $46.19, and he has a model price of $41.52. It is 10% lower than the price, but he would like it to correct some more. Would love to buy this at a valuation low of $37.53. He would buy some now, and if there was a further correction, he would buy more.

Will this be a beneficiary of the Trump trade? This is an infrastructure company, so if you want to build dams and dig roads, you would think this would be a natural beneficiary of that. But if you look back to when Obama came in, there was a lot of hype and a lot of noise around infrastructure projects that were going to be done. Very few of them got shovel ready. Good stock and good cyclical if you want to get infrastructure spend, but he does wonder about US commitment. He would take a pause.

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.

This builds large construction projects. You would think that in an environment where we are going to start to see infrastructure spend, that the company should be positioned. It’ll be interesting to see if the US is actually going to dig; start building dams, pipelines, etc. and the actual execution occurs. That is the challenge. He would prefer SNC-Lavalin (SNC-T).

We are starting to see global infrastructure everywhere. These kinds of companies are going to benefit. However, in terms of upside and expectations how many of these projects are shovel ready. You can wait 6 months or so to see how this plays out. It is definitely a segment to watch. He prefers SNC Lavalin (SNC-T).

Has owned this in the past, but sold her holdings several months ago to make room for another US company, which she felt had better growth prospects. This is a global engineering/construction company. They have felt the negative impact of weak commodity prices in mining, as well as weak energy prices. Their backlog growth has not been as robust, so they had to bring earnings down. A very high quality name, so that in the next up cycle, they are going to realize even better margins. They will continue to win new business as the commodity price improves. A name that she would revisit if she felt that the commodity cycle was largely behind us.

Governments around the world are fiscally constrained. We are back to multi year lows. He starts to get interested from a value perspective. We could look for a trading rally, but that’s all.

They are probably bottoming out here. This has always been a well regarded and well-run engineering company. It’s struggling with the reality that the emerging markets are in tough shape, the mining industry is in tough shape, and the energy business is also struggling. When the commodity and the global economy start to re-accelerate, this is the kind of company that will perform well. Dividend yield of about 1.8% while you wait. Doesn’t think you need to be there right now. It’ll probably be 2 years before you see a substantial, sustained recovery in large energy and mining projects.

It has underperformed because energy is one of their end markets. They have not seen any project cancellations, however. It is being unduly punished. She decided to stick with it. They restructured their operations.

The macro argument is that with the coming of the recovery in the US and eventually Canada, there will be a lot of money spent on infrastructure. Two others are JEC-N and SNC-T and to a lesser extent STN-T. He wants to see more of an improvement before jumping into them.

(A Top Pick June 3/14. Down 24.56%.) Engineering construction company. The reason for the decline is the pullback in crude oil prices. Half of their earnings come from the energy sector. Still likes.

53% of revenue comes from the oil sector where companies have cut Cap X spending. It’s the wrong space.

World’s largest construction/engineering company. The whole group has been under pressure and has not been doing too well. Within that group, he far prefers SNC Lavalin (SNC-T) because it has been hurt, not only by the global slowdown, but by the scandals which are now moving behind them, and he sees lots of good growth for them. He would look at SNC as one that has lagged and will outperform. Getting a lot of good contracts.