Shaw Group: A post-Sandy rebuilding play?

This engineering company could benefit from civil works projects in the wake of the superstorm.

By TheStockAdvisors Nov 16, 2012 9:38AM

Digital Vision Ltd SuperStockBy Vivian Lewis, Global Investing

Could a tidal barrier system make sense for the New York harbor? This thought has led me to look at who got contracts for the major post-Katrina public works projects from the US Army Corps (which is authorized as part of the military to build levees, dikes and other flood control systems).

As it turns out, we already own it in our model portfolio. We previously purchased Shaw Group (SHAW) as a 'backdoor' way to buy Chicago Bridge & Iron (CBI).

Shaw first came to my attention because it is building a US facility for disposing of surplus weapons-grade plutonium in cooperation with Areva of France, which we used to own. So when the bid from CB&I came along, I opted to buy Shaw.

I later learned that Shaw (out of Baton Rouge) helped provide basic supplies, water, new roofs and housing, plus electricity) after Katrina. Shaw then pumped out 50 billion gallons of water from New Orleans and ran shelters in Texas for disaster victims. Those are good references.

It then led the largest design-build civil works project ever awarded by the Army Corps of Engineers, the Inner Harbor Canal Surge Barrier for New Orleans.

Shaw provided project management, design, and construction for the IHNC, which is two miles long and has three flood gates. The barrier is to keep the confluence of the Mississippi River and the Gulf Intercoastal Waterway from surging as they did in 2005; the job was completed by Oct. 2009.

Shaw also worked for the MTA and Metro North in The Bronx to rebuild Yankee Stadium stations on the subway and railway beating the schedule thanks to pre-fab construction in 2009.

Chicago Bridge & Iron is an ADR. Despite its name, the company is not from Chicago, and it doesn't build bridges out of iron. Rather, the global engineering and construction group is incorporated in the Netherlands.

It has announced a planned takeover of The Shaw Group for just over $3 billion subject to shareholder and regulatory approvals. We continue to recommend buying SHAW as a way to own the Chicago Bridge & Iron ADRs.

More from

Nov 16, 2012 10:04AM
Why would a civil engineering group making money on rebuid and new construction work after a huge disaster be news? I see jobs, thank goodness. As long as they use American labor, go for it!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

125 rated 1
267 rated 2
455 rated 3
612 rated 4
682 rated 5
695 rated 6
632 rated 7
472 rated 8
279 rated 9
147 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.