For builders, these are good days that keep getting better. No, I'm not talking about homebuilders -- they're in trouble -- but rather large-scale engineering and construction firms like Washington Group
Of course, large-scale projects have large-scale lead times. So the fact that Washington Group saw revenue rise 15% and margins improved (adjusted for some items last year) is good news, but even more could be on the way. Although the reported backlog was down 2.1% from last year, new awards increased almost 13%, and management sounded pretty bullish on order award prospects through the rest of the year.
Washington Group continues to see ample opportunities across the board. While I think energy/chemical spending will start to slow in a couple of years, management sounded quite optimistic about ongoing demand in the LNG market, which would be good for both this company and rival Chicago Bridge & Iron
All that said, it's the power market that investors are really starting to pay attention to these days. To that end, the company announced work with the likes of Reliant Energy
I'll acknowledge that there's an above-average amount of guesswork in valuing this sector these days. But by the same token, Washington Group has no debt and comparatively low relative valuations. Were I to take a flier on the demand for large-scale infrastructure projects, this would be one of the first places I'd look.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).