Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of construction and engineering specialist Shaw Group
So what: Shaw's shares have slipped on weak revenue and shrinking margins over the past year, but the first-quarter beat -- EPS of $0.48 versus the analyst consensus of $0.43 -- suggests that the worst may be behind it. Although Shaw's top line still dipped in the quarter, strong backlog growth and falling input costs are giving Mr. Market plenty of good feelings about a sustainable turnaround.
Now what: Looking ahead, Shaw sees adjusted full-year 2012 EPS of $2.05-$2.15, easily topping Wall Street's forecast of $2.02. "Our overall outlook for the year continues to be positive as we maintain our complete focus on project execution and increasing bookings," said Chairman and CEO J.M. Bernhard Jr. More important, with Shaw continuing to trade at a forward P/E discount to peers like Fluor
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