Shares of Jacobs Engineering Group Inc. (JEC) hit a new 52-week high of $58.44 on Jul 15 and eventually closed at $57.85. The company currently has a market capitalization of $7.57 billion.
Year-to-date, share prices have recorded a healthy return of 32.2%. The company’s long-term estimated earnings per share growth rate is 13.5%. Average volume of shares traded over the last three months came in at approximately 645K.
Jacobs’ shares have been gaining momentum due to the constant contract wins of the company. Jacobs maintains long-term relationships with its customers, helping it to earn repeat business from the existing clients.
Recently, Jacobs won a contract from Bayer CropScience Australia, the agricultural wing of the Bayer Group. The contract involves the early stage engineering at Bayer’s expansion project at the formulation plant, situated at Kwinana, Western Australia.
In Jun 2013, Jacobs won a number of significant contracts. The company was awarded a contract by Eastman Chemical Company (EMN) to provide its services for the latter’s Corporate Business Centre in Kingsport, Tenn. Also, Jacobs received a contract from the Department of Homeland Security in order to supply program management, engineering and technology support services under the Technical, Acquisition and Business Support Services (:TABSS) contract. The contract spans over five years.
Moreover, Jacobs acquired a privately held telecommunications solutions provider, Compass Technology Services, last month. This strategic move of purchasing Compass will enhance Jacobs' efficiency in the telecommunications infrastructure design and construction. With this purchase, Jacobs’ product offerings will increase, and the company will be able to expand its footprints in the Southeastern U.S.
Other Stocks to Consider:
Jacobs is largely dependent on government expenditures to earn revenues, and thus is exposed to the risk of significant slowdown in government’s infrastructure spending or a termination of government funded projects. Jacobs currently carries a Zacks Rank #4 (Sell). Other stocks worth a watch in the industry are Beazer Homes USA Inc. (BZH) and Chicago Bridge & Iron Company N.V. (CBI) each carrying a Zacks Rank #1 (Strong Buy).
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