1 stock to play Japan, Mideast reconstruction

Infrasturcture needs to be replaced, and Chicago Bridge and Iron is ready.

By Jim Van Meerten Mar 24, 2011 10:21AM
Lately I've been looking for a way to get in on the building boom that is bound to happen after this Japanese quake.  A company that keeps getting mentioned is Chicago Brigde and Iron (CBI)

It came up when I was comparing companies that have had at least 10% growth in sales and earnings, and are expected to continue growing, against the Barchart technical indicators, and Chicago Bridge and Iron (CBI) was near the top of the list.

CBI designs, builds, repairs and modifies steel tanks and other structures and associated systems. The company designs and builds petroleum terminals, refinery pressure vessels, low-temperature and cryogenic storage facilities and elevated water storage tanks for clients internationally.  It also sells to the wastewater-treatment, mining and nuclear industries. Japan needs these infrastructure goods and services.

Since my ancestry is Dutch and I was born in Chicago, the company caught my eye.  It was founded in Chicago in 1889 and went public on the NYSE in 1977.  After being acquired by Praxair in 1996, it was again spun off in 1997 and is based in the Netherlands.

Technical Factors:
  • 96% Barchart technical buy signal
  • Trend Spotter (tm) buy signal
  • 12 new highs and up 20.23% in the last month
  • Relative Strength Index is 65.97% and climbing
  • Trades around 39.78 with a 50 day moving average of 35.24
Fundamental Factors:
  • Wall Street brokerage analysts have released 16 buy and 6 hold recommendations
  • Sales are projected to increase by 23.00% this year and 13.40% next year
  • Earnings are estimated to increase by 16.70% this year, 14.30% next year and continue by 11.33% annually for the next 5 years
Investor Sentiment:
  • This is a widely followed stock with over 2000 Motley Fool subscribers having this company on their opinions lists
  • CAPS members vote 1,352 to 31 that the stock will beat the market
  • The experienced All Stars agree 555 to 5 -- That's 111 to 1 ration!
This is a stock with a great story.  It has products that are needed for the rebuilding of Japan.  I'll go out on a limb and say with all this fighting and bombing of energy and infrastructure facilities in the Middle East another growth market is opening up.  It is one of the few companies with a proven past, a predicted great future and a wide following by both the professional and individual investor as well.

If you don't buy it doesn't it deserve to be on your watch lists?
Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs on Barchart.com  in his daily blog -- Barchart Portfolio Blogs.


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