E&C Picks: Electric Transmissions
2008-12-16 19:07:43
Our top picks this week come from our roundtable discussion on Engineering and Construction. Analyst Tahira Afzal of KeyBanc Capital Markets tells us that the only part of her sector she can recommended is the part dealing with electric transmissions. She has two picks in this space:- MYR Group (MYRG)
- Quanta (PWR)
Ms. Afzal: I like names that are so dirt cheap that they are trading close to liquidation and, again, might have some catalyst ahead of them. I don't think anyone wants to buy anything that doesn't have a catalyst ahead of them. The names that I am pointing to within my coverage space would probably be the electric transmission names. I think that's where I see a lot of project activity still going ahead. The names over there would be Quanta (PWR) and a smaller company called MYR Group (MYRG). Both are very highly leveraged in that space.For the complete Engineering and Construction report, including a full overview of the space, an outlook for the future and more stock picks, click here.
Engineering & Construction in the New Administration
2008-12-16 12:00:36
In our special focus on Engineering & Construction this week, we spoke with analyst John Kasprzak of BB&T Capital Markets about the state of this space. While the economic downturn has had a definite impact on E&C space, Kasprzak sees some hope for the future in how the new administration is talking about plans for construction:Mr. Kasprzak: From a construction point of view, next year offers an interesting convergence of factors. First of all, the new administration has talked openly about trying to stimulate the economy within infrastructure spending. Every billion dollars of incremental spending creates over 40,000 jobs, for example, and so that seems to be an area of focus. Then when you consider that the current federal highway program expires September 30, 2009, and they come in six-year increments, Congress was already on tap to pass a new highway bill next year. So the timing could be good because the need is there to pass a new bill and you could combine that with a view from the new administration that an increase in spending in the new bill could help stimulate the economy.For the complete Engineering & Construction report, including a complete interview with Mr. Kasprzak and a roundtable panel giving an overview of this space, click here.
Strength in Eastern Rails
2008-12-11 17:05:25
As a second focus this week here at TWST, we focused on the Railroad space. While analyst Kevin Kirkeby of Standard & Poor's is neutral on the space as a whole, he does point to the strength of 3 stocks in Railroads, all based on the east coast. These are:- Norfolk Southern (NSC)
- CSX (CSX)
- Canadian National (CNI)
Mr. Kirkeby: Thematically, we favor the East Coast rails over the Western ones...They operate in regions of the country with greater population density, and a greater number of freight corridors where rail intermodal service can displace trucks. Norfolk Southern, for one, is working on its Heartland Corridor and Crescent Corridor initiatives. CSX has its National Gateway project, linking inland distribution centers to the ports. These efforts will provide an added volume boost, in our view, even if the greater economic environment proves more difficult than anticipated.For the full interview with Mr. Kirkeby, including a complete overview of this sector, where its headed, and more stock picks, click here.
Airgas Grows Again
2008-12-03 17:39:44
Airgas Inc. (ARG), a leading distributor of industrial medical and specialty gases, completed a deal on Monday to buy three additional businesses. With these companies, Airgas increases the number of companies it has acquired this year to a full dozen and a combined revenue of $185 million. The three companies Airgas bought Monday are Gordon Woods Industrial Welding Supply, Inc., Accu Air Gases & Equipment LP and Summit Gas & Gear LP. These companies are separately managed industrial gas and welding supply distributors with a combined avenue revenue of $25 million and 10 different locations in Southern California. This week, as part of our special focus on Industrial Manufacturing this week, we spoke with Peter McCausland, the Chairman and CEO of Airgas. For the complete interview click here. For our complete Industrial Manufacturing report, including interviews and analysis from a variety of perspectives on this space, and stock picks, click here.
Industrial Manufacturing Pick: Danaher
2008-12-01 18:53:32
Our special focus this week is on Industrial Manufacturing. Like much of the market, this particular sector has been hard hit since the end of September. However analyst Jim Lucas of Janney Montgomery, LLC does have a few picks, and at the top of his list is a company called Danaher (DHR):Mr. Lucas: Danaher, to put it quite simply, is best in class. Just go back to the first criterion, identifying companies with strong management. With Danaher, it all starts with the Danaher Business System. In my 15 years of research, it is the most unique operating culture that I've come across, and it is a culture that permeates the entire organization. Danaher is a prodigious cash flow generator, and they do an exceptional job of redeploying that cash in a shareholder friendly manner, meaning that, when there are opportunities when the stock is undervalued and there are not a lot of acquisitions to do, they buy back stock.For the complete Industrial Manufacturing report, including a full interview with Mr. Lucas as well as interviews CEOs from top companies in this sector, click here.