Jacobs Engineering Swimming in Contracts and Backlog
Jacobs Engineering seems to be the best of breed in the infrastructure play. It seems like they are awarded contracts every day. Just scanning the headlines …
Tuesday Aug 21: GlaxoSmithKline, Network Rail and Magnox Electric – and a contract extension from Lockheed Martin.
Tuesday Aug 14: Four contracts – one from Pfizer, one from the Department of Energy, one from the New Jersey National Guard, and one from FUJIFILM Imaging Colorants Limited.
Friday Aug 10: Energy Depr. Renews Oil Reserve Contract for $600 Million.
Tuesday Aug 7: Three new contracts, one from NASA for facility operation services and two more from Hofung Technology for sulfur recovery projects in China.
Tueday July 31: Three contracts, one from the Indian Oil Corp. Limited, one from Slavneft-Yanos for a refinery upgrade in Russia, and one from British Energy Generation.
Tuesday July 17: Four contracts from RohMax Asia Pacific, U.S. General Services Administration, The U.S. Army Corps of Engineers Far East District, and the Sunderland City Council in England.
This kind of business is good news for Jacobs (JEC). The stock pulled back from its recent 52-week high of $70 last week, and at around $60, it is a screaming buy. Earnings growth clocked in recently at over 40%, yet the stock trades at a mere 22 times earnings. With a huge backlog, hardly any debt and plenty of cash, the company has plenty of room to run.
This stock was part of my Top 10 Stocks for Global Expansion and I reiterate my buy.
– Faisal Laljee
Full Disclosure: I own JEC but my position can change anytime without notice.
Faisal, its a great group isn’t it? I have McDermott (MDR) as the biggest personal holding on this pullback to 80, as well in my ‘fake fund’, along with Foster Wheeler (FWLT), Perini (PCR), and Jacobs which you identified. I am going with a basket approach and the ‘cheapest’ (MDR) for now – Fluor (FLR) has been incredibly strong in this pullback and seems to be getting the ‘leader’ valuation. Hard to go too wrong in this sector with the global wide modernization/build out along with hand over fist profits by those who create energy projects. How the heck did you find KMTUY?
Need to dig into that 1.
Mark
http://fundmyfund.blogspot.com/
I know a contractor who told me about how Kohmatsu makes machinery thats better than Caterpillar. Their Japanese quality and parts are more reliable (sound familiar?).
Anyway the only downside in Japanese stocks is Japan’s currency. The Yen has been beaten down for way too long. Once it recovers, some of my fav Japanese stocks – Nintendo and Kohmatsu will run into head winds.
NTDOY is a monster. Truly missed that one but I still think it has a long way to go – the only console where grandma will play and have fun
Talk about opening video games to a whole new class of consumer. Game Stop reported gangbuster earnings today as well.
Where do you research KMTUY since its Pink sheet – info is limited on traditional sources such as Yahoo Finance.
Agree on the yen. Carry trade needs to unwind and its going to be quite a process.
Thanks.