Please respond to Sivy on Stocks SIVY ON STOCKS from money.com
April 25, 2001

Construction project

The need for aggressive oil exploration and new electrical power plants
should be a bonanza for firms like Fluor that can manage such projects on a
global basis.

By Michael Sivy

It may seem hard to believe today, but back in the 1970s, one of the
hottest stock groups was Construction and Engineering. These C&E firms
managed mega-projects, including oil refineries and pipelines in the Middle
East, and were minting money because of the oil shortage. But during the
past decade, the energy crisis seemed like only a distant memory. And even
the best C&E firms, such as Fluor [FLR], ran into trouble.

For most of the late 1990s, Fluor's earnings were stagnant. The company
over-expanded in 1994 and subsequently began missing its growth targets. As
the problems got worse, the stock fell from a high of $75 a share in 1997
to less than $23 early last year.

To fix these problems, Fluor decided it would be smart to split the company
in half, separating its C&E businesses from its coal-mining operations,
which now trade as Massey Energy [MEE]. Since the split late last year,
Flour has been doing well and appears poised for even better times to come.

But this improved performance has gone unnoticed by many investors because
the division of the company and the shift of its reporting schedule from a
fiscal to a calendar year have made earnings comparisons difficult. In
fact, some research sources have stopped following the stock altogether.

That's a pity because the outlook for energy is better than it's been in a
decade. The scare of higher crude prices should greatly improve prospects
for oil projects, while electricity shortages in California -- and possibly
in other states as well -- will encourage the construction of power plants.
In fact, a joint venture between Duke Energy and Fluor is one of the
world's leading contractors and has the largest U.S. market share for the
construction of natural-gas-fired power plants. Two weeks ago, the
partnership was awarded a contract to help build two power plants in
Massachusetts.

Fluor's share price has climbed more than 50 percent since its
restructuring, and several major brokerages have upgraded the stock to a
"buy" on the strength of Fluor's improved business outlook.

At a current $51 a share, Fluor trades at 26 times this year's estimated
earnings. Profits are projected to gain 18 percent next year and then
continue to grow at a core annual rate of about 15 percent. And those
estimates could easily prove to be too low if the climate for energy turns
out to be more positive in the next five years than it has been in the past
five. And to me, that looks like a pretty good bet.

###

Post your comments on Michael's column at:
http://www.money.com/depts/investing/sivy/index.html

To subscribe or unsubscribe to Sivy on Stocks, go to:
http://www.money.com/email/

-----------------------------------------------------------
MARKETPLACE
-----------------------------------------------------------
CONTACT THE BIGGEST COMPANIES IN THE WORLD!
Over 5,000 contact names in the OFFICIAL FORTUNE Databases.
DOWNLOAD THEM NOW!
http://www.fortune.com/datastore/?mn1

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Special Internet Offer!!!

Sign up for a RISK-FREE issue of MONEY MAGAZINE at
http://www.money.com/subscribe2

Or if you prefer call our toll-free number 1-800-544-4594

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

We may, from time to time, contact you with offers for Time Inc.
products and services which we think may be of interest to you.
If you would prefer us not to contact you in this manner, AND
YOU DID NOT INDICATE THIS PREFERENCE AT THE TIME YOU SIGNED UP
for the Sivy on Stocks online newsletter or any other Time Inc.
online newsletters, please let us know by sending us an e-mail
at <no_solicit@money.com>.

Additionally, from time to time we may provide your e-mail
address to carefully chosen companies whose offers we think may
be of interest to you.  If you would prefer us not use your
e-mail address in this manner, AND YOU DID NOT INDICATE
THIS PREFERENCE AT THE TIME YOU SIGNED UP for the Sivy on Stocks online
newsletter or any other Time Inc. online newsletter, please let
us know by e-mailing us at <no_transfer@money.com>.