Kashyap_Swamy's  Instablog

Jacobs is one of the premier E&C companies in the US and perhaps the World.

Here are some its key strengths

• Backlog of $16 bn (1.25 years of revenues) that consists of mostly cost-reimbursible contracts
• Strong balance sheet with net cash position of $746 mn or $6 per share
• Excellent execution track record and reputed management
• Well diversified backlog with close to 20% of it in Federal govt programs

The only recent negatives have been some newslfow around project deferrals in some Canadian oil sands projects. However, management has already given very conservative guidance for 2009 EPS between $3.1 and $3.6

Yet, JEC is the worst performing stock in its peer group : down 17% YTD. It has lagged behind the likes of Worley Parsons (WOR AU) . WOR is an interesting comparison as it also has significant exposure to Canadian oil sands yet has significantly higher revenue and eps assumptions than JEC.

I wonder if JEC will continue to underperform until their next earnings. Any bright ideas?

Disclosure: Long JEC