Fluor Corp. (FLR)

(A Top Pick May 6/14. Down 20.06%.) An engineering construction company based out of the US. Energy is one of their end segments and this is why it has come off. A global company and very well respected. Only about 37% of their client base is in the US. If you have a longer-term view, which she does, they will ride this out.

Has been hit by the energy downturn. He does like it. In that particular space, he feels it is far and above anybody else. You have the cream of the crop in this, and if you have it, Hold it.

This is an interesting area. Has been beaten up a lot with a lot of exposure to the energy space. You don’t need to be involved in this area at all. Expects there will be a lot of continued pressure on spending for a significant period of time.

This has been unfairly punished because of its exposure to energy. Within the E&C and construction space, this would be one of his preferred names. It has one of the most experienced management teams that can invest and construct large complex LNG, oil and gas, petcom (?) projects. The petcom (?) Industry is the one area where he thinks there is growth coming in 2017-2018. Right now there are expected to be 2 or 3 large ones to be built in the southern US, and this company is one of the largest and leading construction companies in this space. The price is not expensive, but in the short term there is near-term risk if oil continues to get cut back.

He is happy with it. It is the cream of the crop. It has come off because of the fear that energy related projects will be cancelled or postponed. Long term this is the place to be, however. The strong US dollar will harm any company with foreign business, but he understands they do some hedging.

Stock has come off with declining energy prices. They will be reporting later this month and there might be some pullback. She is willing to wait and see what they have to say. Of all the companies in the energy/construction space, this is the one that she likes to own as they are the best well-managed and well diversified.

They’ve all been really hurt here. There is no support and resistance on a one year chart. They have been hit by energy exposure, but they are not really all that affected by the oil price. So he would pick away at these.

Not currently buying this. You want to see stabilization. A lot of their clients are big major international companies, so they are really thinking longer-term. She doesn’t think $40-$50 crude is going to be here for a number of years. When these companies make their plans, they are years out and typically don’t see a lot of cancellations or deferrals. Waiting for the next quarter in order to gauge what they see out there.

The whole group has been doing poorly. He owns SNC-T. FLR-N is in a world of its own. Biggest concentration of work in the energy area, so the most vulnerable.

This is a great story. It has come off a little because about 60% of their business is energy related. He thinks the selloff as being overdone. P/E ratio is roughly 14.4% for this year, 12.8% for next year and 11.4% for the following year. This is cheap. In a great position to benefit from long-term growth.

One of the largest engineering and construction firms in the world. It has high exposure to oil. If you want to play in this space you have to be cognizant of the risk. It tends to be quite volatile.

You can pick this up on weakness and see it trade up to the mid to high teens. Margins are much better on their energy and infrastructure projects. The book to bill ratio dropped close to 1 and so is weaker right now, but the overall trajectory is positive.

Global engineering construction firm. Tends to be a bit more volatile. A lot of their growth they are seeing right now is in petrochemical and energy. This is probably why it has pulled back. They are global and are seeing a lot more companies wanting them to come in and do an assessment and study and then actually build a project out. You could either start picking away at it or wait until the market stabilizes.

Is generally in favour of engineering stocks because the world is way behind on infrastructure. Prefers SNC-T as the stock turns around.

Favourite in the Cap-X space. Thinks there will be a recovery in the space. If you like the market longer term it is a buy. It is a buy after this pullback.