URS Corp: Pull-back is buy opportunity

Engineering/construction services company URS Corp's likely stock trend is higher because industrial/commercial power project activity should bottom in the quarters ahead, and that fact, combined with a lack of project cancellation by state and local governments, and new federal projects, should convince institutional investors that URS's revenue growth will accelerate in FY2010.

Technically, the drop from $53 to about $43 is most likely a constructive correction, following this spring's vault from the $27-30 range.

However, I've revised the Sell/Stop Loss to $28 from $22, in the event the economic recovery does not lead to the projected engineering work.

The First Call FY2009/FY2010 EPS estimates for URS are $2.97 to $3.27.

Stock Analysis: URS Corp is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in URS now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your URS position before December 2009. Revised Sell/Stop Loss if you bought shares in this company: $28.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.