Dallas-based Permian Investment Partners reported a significant purchase of KBR (KBR 0.61%) in a November 14 SEC filing, increasing its stake by nearly 1.3 million shares shares, which contributed to an estimated $58.8 million position change from quarter to quarter.

What Happened

According to an SEC filing released on November 14, Permian Investment Partners increased its exposure to KBR (KBR 0.61%) by buying 1.3 million additional shares during the third quarter. The position’s value rose to $150.5 million from nearly 3.2 million shares as of September 30. The transaction lifted KBR to 17% of the fund’s U.S. equity AUM, up from 13% in the previous quarter, with the fund reporting $885.7 million in total AUM.

What Else to Know

Top holdings after the filing: 

• NYSE:TIC: $193.9 million (21.9% of AUM)
• NASDAQ:GRFS: $173.8 million (19.6% of AUM)
• NYSE:KBR: $150.5 million (17% of AUM)
• NYSE:NRG: $125 million (14.1% of AUM)
• NYSE:ARMK: $81.7 million (9.2% of AUM)

As of Monday, KBR shares were priced at $42.97, down 27% over the past year and well underperforming the S&P 500, which is up about 13% in the same period.

Company Overview

Company Snapshot

• KBR delivers scientific, technology, and engineering solutions, including proprietary process technologies, digital platforms, and consulting services for government and commercial clients.
• The company generates revenue through contract-based services in government solutions (defense, space, intelligence) and sustainable technology solutions (process licensing, energy transition consulting, and digital operations platforms).
• It serves U.S., U.K., and Australian government agencies, as well as global clients in the energy, chemicals, and infrastructure sectors.

KBR, Inc. is a global engineering and technology company with a diversified portfolio spanning government and commercial markets. Its dual-segment strategy leverages deep expertise in mission-critical government services and proprietary sustainable technologies for industrial customers. The company’s scale, technical capabilities, and focus on energy transition position it as a partner of choice for complex, high-value projects worldwide.

Foolish Take

Permian’s move highlights a growing divide between market sentiment and operating performance. While shares remain well below their late-2024 peak, the underlying business continues to generate consistent cash flow, expand margins, and build backlog across mission-critical markets.

KBR’s latest quarter underscores that disconnect. Revenue came in at $1.9 billion, essentially flat year over year, but profitability told a different story. Adjusted EBITDA rose 10% to $240 million, with margins expanding to 12.4% from 11.3% one year earlier. Adjusted earnings per share increased 21% to $1.02, and operating cash flow reached $198 million for the quarter. Meanwhile, backlog and options totaled $23.4 billion, supporting multi-year revenue visibility even amid slower award timing.

Within the portfolio, this position now sits just behind the fund’s largest holdings, signaling conviction comparable to other core ideas rather than a tactical trade. That context matters. The fund already favors capital-light, cash-generative businesses with durable customer relationships, and KBR fits that profile through its government services and sustainable technology segments.

Glossary

AUM: Assets Under Management – The total market value of investments a fund or manager oversees.
Reportable AUM: The portion of a fund’s assets required to be disclosed in regulatory filings.
Stake: The ownership interest or shareholding a fund or investor holds in a company.
Exposure: The degree to which a fund or investor is invested in a particular asset, sector, or market.
Position: The amount of a particular security or asset held by an investor or fund.
Dividend Yield: The annual dividend payment divided by the stock’s current price, shown as a percentage.
Trailing Twelve Months (TTM): The 12-month period ending with the most recent quarterly report.
Contract-based services: Services provided under formal agreements, often with set terms and deliverables.
Process licensing: Granting other companies the right to use proprietary industrial processes or technologies, typically for a fee.
Energy transition: The shift from fossil fuels to cleaner, more sustainable energy sources.
Proprietary technologies: Technologies owned and controlled by a company, often protected by patents or trade secrets.
Mission-critical: Essential services or systems whose failure would seriously impact operations or objectives.