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Strategies & Market Trends : Value Investing

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To: gizwick who wrote (50858)	2/12/2013 10:41:21 AM
From: E_K_S	of 78744

Hi gizwick - Re: LNEGY Check the thread for earlier posts. The company is winning NG engineering & design contracts all over the world. CNX & NOBLE just awarded them their business worth hundreds of million. If you look through the link I posted for their engineering division and dig down to awarded new contracts, just look at all their recent wins, $ amounts and where they are located. Much more impressive to me than what CBI was doing three years ago. CBI was more than a double from that point three years ago. I expect NG infrastructure engineering builds to grow high single digits especially in the U.S. (maybe more). China has huge pollution problems from burning coal and needs to migrate to NG. Japan and Germany will no longer use nuclear to generate electricity and must switch to NG. All will require NG processing facilities to produce LNG. It's my bet that LNGE will get their share (if not more) of these contracts. They are priced a bit high when you look at their PE but you have to factor in their very profitable gas delivery business that generate high margins (and typically sell at a much higher PE). Therefore, one can make the argument that their Engineering business is cheap when compared to CBI and/or FLR. You are buying the bundled business when you buy LNEGY. The other plus is when LNEGY wins an engineering design, there is a lot of future service contract work that also works into their distribution & processing side. So one business feeds the other. My initial position is small but I would like to build a core amount of shares at lower prices if/when it presents it'self. So on any 10% correction, I will be happy to add more shares. That's my take from my due diligence over the last few weeks. I may have over looked some things and could be wrong about my conclusions (and I have many times to different degrees) but for me, this looks like a good CAGR play at a reasonable price. Their engineering division is the gem and when compared to CBI's value, it could be seen as undervalued. EKS

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