Jacobs Engineering Group (NYSE: JEC) provides
technical, professional, and construction services to industrial, commercial, and governmental customers worldwide. The company designs and engineers process plants, buildings, infrastructure projects and manufacturing facilities. It also provides operations and maintenance services. Clients include Ford Motor (NYSE: F), GlaxoSmithKline (NYSE: GSK) and the US Department of Defense. Fluor Corporation (NYSE: FLR) and Foster Wheeler (NASDAQ: FWLT) are competitors.
Investors were pleased last week, when the firm reported fiscal Q2 EPS of 80 cents and revenues of $2.66 billion. Analysts had been looking for 77 cents and $2.63 billion. Backlog increased $5.5 billion, or 51.5%, from the end of Q2 2007. Management also guided FY08 EPS to $3.00-$3.30, versus consensus of $3.16.
The announcement
popped JEC shares out of an early April "cup" into the late April "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle".
Brokers recommend the issue with four "buys", eight "holds" and one "underperform". Analysts see a 19% growth rate, through the next year. The JEC Price to Sales ratio (1.14), Sales Growth rate (27.40%), EPS Growth rate (45.45%), Return on Assets (10.32%) and Return on Investment (16.27%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 85% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $49.58 and $103.29. A stop-loss of $77.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
Comfort Zone Investing: Survival of the fittest -- letting some banks fail
Three All-American stocks for portfolio fireworks
Michael Jackson fireworks, the workaholic
