Almost any company that can establish a niche — even a relatively small niche — in an expected global infrastructure transformation will be immensely profitable, suggests Stephen Leeb, global resources sector specialist and editor of Investing Daily's The Complete Investor.

And particularly if you start with relatively small companies, you are talking about numbers that will be hard to believe.

Fluor (FLR) is one of our smallest Growth Portfolio recommendation. As a leading engineering and construction firm, it has multiple opportunities in all sorts of infrastructure projects, from a major carbon-free LNG to data centers to hospitals to roads and bridges.

In addition, the company has a majority stake in NuScale, a private nuclear energy company with a leading position in small modular re-actors, which could play a major role in the transition to clean energy.

NuScale is unlikely to produce profits before the decade’s end. But the growing recognition of nuclear energy’s importance combined with the uniqueness of NuScale’s modular and safety features should boost Fluor’s P/E long before profits are realized.

Over the shorter term, Fluor’s recent performance shows it has learned from its near-death experience late last decade, which came largely from underestimating costs on some major projects.

Profits for the year’s first half have already topped Wall Street expectations for the whole year. Though the company has lowered its 2024 profit target from about $3.00 a share to $2.50, that drop reflected a convertible debt offering.

Wall Street, however, is slow to forgive, making the company’s forward valuation metrics compelling. Projected free cash flow yields are 6.4% for 2022 and 12.3% for 2023. Forward price to book is near 1, while cash exceeds all debt.

Admittedly Fluor’s history shows that major engineering projects carry inherent risks. But we believe that the company, whose new management is distinguished by many past successes, can deliver gargantuan gains to shareholders.

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