2008-10-01 12:06:02 -
- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst John Nelson Simon, who talks about Boeing (NYSE: BA), Fluor (NYSE: FLR), KBR, Inc. (NYSE: KBR) and URS Corp. (NYSE: URS).
A synopsis of today's Analyst Interview is presented below. The full article can be read at at.zacks.com/?id=2678.
In light of
what we've seen in the financial sector recently, is it better to invest in an industry that manufactures goods?
I don't feel qualified to pick between a financial company and a capital goods company. They each have their ups and downs. What I do know about the financial companies is that I saw them make the exact same mistakes back in the 1980s when I lived in Southern California and the Savings & Loans and Orange County went bankrupt. I also have seen Boeing (NYSE: BA) and Fluor (NYSE: FLR) go through hard times -- repeatedly.
I think one should stick to what they know...and I know Aerospace & Defense as well as Engineering & Construction. Having said that, I think this is a great time to own E&C stocks. And, when Boeing starts delivering the 787, it will be a great time to own Aerospace stocks. The big question I have is: What will happen to defense spending? That question affects both of those sectors.
Is there much reliance on U.S. government contracts for companies in your coverage? If so, does the Treasury bailout look as if it will negatively affect construction of bridges, roads, etc.?
Some of the companies have fairly large exposure to defense contracting, particularly KBR, Inc. (NYSE: KBR) and URS Corp. (NYSE: URS). However, as we wind down our military activity, there is a good possibility that reconstruction efforts will accelerate.
I don't think the bailout will be much of a factor on local E&C activities, as most states are now moving to using bonds to support their infrastructure projects, and people are eager to loan money to their states as opposed to whoever will be the next big investment broker (probably somebody in Florida or South Carolina...but not New York).
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