Quanta Services (PWR)

They said that they have $960 billion in total addressable market today will reach $2.4 trillion by 2030 from data centres and grids. Super growth.

PWR is a leading specialty contractor that offers infrastructure solutions for electric power, oil and gas pipelines, and more. It has recently been rising due to increased electricity demand from AI/data center buildouts. It is a $57B market cap, with strong forward sales and earnings growth estimates, and rising analyst estimates. Its margins have been expanding nicely, cash flow generation is strong, and it has a decent buyback policy. Valuations have risen to about 36X forward earnings now, and we might expect some price consolidation in the near-term. Valuations can continue to extend from here, but we would like to see earnings grow at a quicker pace to justify more than 36X earnings. We would be OK buying, and we like it around $360 to $370. 
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Growth is higher than its historical, and there's capital flowing into this sector. Strong momentum.

She keeps buying it whenever it's down. It doesn't need the Clean Energy Bill to grow; they have a record backlog. Last quarter, they beat and raised. The US will spend $4 trillion on electrification and the grid upgrade through 20205, and Quanta will benefit. Data centres need electricity.

Is buying Quanta Services, involved in data centres which is an ongoing trend. She sold Zoetis to fund part of this buy. Zoetis is not exposed to Medicare, which is good, but the stock was not performing that well. Pet care is a good business, but the market wasn't rewarding this stock.

She trimmed GE Vernoa to buy more Eaton and Quanta Services, and both just reported blow-out quarters. Quanta: EBITDA +40%, backlog +14%. Eaton: data centres +45%, pipeline +65%, and backlog 3x more than normal. Good valuations.

Great company. Would recommend buying. 

Are exposed to consumer and electrical spending in utilities. They have strong pricing power

It's beaten the S&P for 5 straight years. They're decentralized, operating in hundreds of smaller, regional contractors tailored to help customers in their areas. And yet they benefit from scale when negotiating with suppliers and customers. From 2010-2022, they earned a 14% compound annual revenue growth rate vs. 7% by the S&P. Consistent. Shares sank in September-October, but they reported a strong quarter and recovered nearly all that lost ground. From January to August their engineering and construction businesses soared on the back of Biden's infrastructure bill. Trades at 25x 2024 PE, not cheap, okay, but he feels the premium is worth paying for because a wave of infrastructure spending is coming as rates decline.

He owns EME instead. 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. 

Very good company that still owns shares in.
Engineering for power grids/electrical problems.
Service style business for EV space - provides infrastructure. 
Excellent fundamentals. 

Most boring tech on earth. Electrification of the world will be a big boost for it. Chart just goes up and to the right. Part of a theme of the onshoring of America. Likely to own for a while.