Dallas-based Permian Investment Partners reported a significant purchase of KBR (KBR 2.31%) 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 2.31%) 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
| Metric | Value |
|---|---|
| Revenue (TTM) | $8 billion |
| Net Income (TTM) | $380 million |
| Dividend Yield | 1.5% |
| Price (as of Monday) | $42.97 |
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.
