Fluor is comfortable accumulating cash as it seeks acquisition targets to complement its construction portfolio, such as more capabilities for deepwater work, according to Seaton, 48, who took the COO job in November.

"Our mining group basically ran the table," Seaton said of the unit's growth while oil-and-gas work flagged. The large projects booked in the second quarter probably won't continue to flow in, and probably will be followed by smaller jobs such as work at copper and iron-ore mines, he said.

Energy companies will resume building facilities such as refineries, mostly in Asia and Russia, Seaton said. The projects also will be smaller than those constructed in the U.S. before the slump, and will likely be in the range of $200 million, he said.

Fluor has a "huge" project in Iraq in the West Qurna field, where the company will be the first to build infrastructure for oil production, Seaton said.

"It really puts us as the premier go-to engineering and construction company for the other companies to use," Seaton said. Exxon Mobil Corp. and Royal Dutch Shell Plc signed a contract with Iraq in January to increase daily production at West Qurna almost tenfold to 2.33 million barrels.

Should Fluor's backlog reach a record, it would do so in the face of "a very cautious marketplace," Seaton said.

"We're still going to have a great year at a time when oil and gas is down from where it was," he said. "We're at an inflection point on oil and gas."

Eoin Treacy's view Investors have so far been slow to see value in Fluor's impressive order book and sound balance sheet, presumably because it intends to spend some of its cash on making acquisitions while prices for the sector are still comparatively low. The majority of shares in the sector remain in base formations, with most of the early relative strength leaders failing to sustain initial upside breaks and have pulling back to extend their Type-3, as taught at The Chart Seminar, bottoms, . This leaves a cash rich, low debt company like Fluor with a number of potential targets. This is a list of 17 US companies in the same or similar sectors that could be potential targets. Also see Comment of the Day on November 27th 2008 and January 5th 2009.


Fluor found support near $30 from October 2008 and has been ranging above $40 for more than a year, with resistance encountered between $55 and $60. It is currently rallying from the lower side of the range and a sustained move below $40 would be required to question scope for further upside.

Jacobs Engineering is one of Fluor's larger competitors and remains in a relatively well defined base. It is also rallying from the lower side and a sustained move below $36 would be required to question potential for further higher to lateral ranging.

URS has also begun to rally from the lower side of its yearlong range. Quanta Services has held above its 200-day MA for the three months and would need to sustain a move below $20 to question scope for some further higher to lateral ranging.

McDermitt International more than tripled from its 2008 low before entering the current yearlong range between $20 and $30. It also recently found support at the lower side of the consolidation and a move above $30 held for more than a week or two would confirm demand has regained medium-term dominance.

Shaw Group remains in a relatively gradual medium-term uptrend and has sustained a progression of higher major reaction lows since bottoming in November 2008. These would need to be broken to question scope for further higher to lateral ranging.

Astec Industries is involved in just about every area of road construction and is considerably smaller than the above companies. It failed to sustain the breakout from its base in April but found support in the region of the higher side and last week's upward dynamic broke the short-term progression of lower highs and put prices back above the psychological $30 level. A sustained move back below $28 would now be required to question scope for some further upside.

Both Granite Construction and Sterling Construction have returned to test their 2008 lows. Both are somewhat overextended relative to their 200-day MA's so there is scope for a reversionary rally. However, at a minimum they would need to break the three-month progression of lower rally highs and sustain moves back into their overhead ranges to indicate demand is returning to dominance beyond a relief rally.