Bookkeeping: Restarting Fluor (FLR) and Adding to Foster Wheeler (FWLT)

Next week is a heavy earnings week for infrastructure names, and these stocks have been beaten down on the "global slowdown" scare. Strangely, even with crude at $100 they have not rebounded much; I believe too many people think they are tied to the US economy still. I believe the best companies will refute this fear next week; if the market respects that or not, I don't know but we are starting to see some relative strength percolate in some of the names.

One of my main positions throughout life of fund has been Foster Wheeler (FWLT) - I like the stock action of late as seen below. 2 weeks of movement up, and the last 4 sessions finally trading back above the 50 day moving average. Further, this is a company heavily involved in the Middle East and increasing exposure in Asia. Despite misgivings for the overall market, I am adding 150 shares in the $77s, to take this from a 1.8% weighting to 3.0% The company reports next Tuesday. If things work out, I expect to see the stock make a run on old highs (mid $80s) at which point I can take some off the table.



I am also beginning a position in Fluor (FLR); another name heavily exposed to international areas. I am making a large initial buy because I am familiar with this name, having held if briefly in the fund [Nov 2: Time to Add to Infrastructure] & [Nov 23: Closing Fluor]. So I am beginning with a 2.3% stake with purchase price approx $130. The company reports next Thursday. The stock appears to have made a 'double bottom' in mid January and early February in the $106-$109 range, from which a nice sized move could be made. Looking at a longer term chart, you can see a series of 3 lower highs from 2007 - if we connect the "dots" and draw a line this would take us up to about $145 before the stock would run into resistance; so if we got that quick 12% I would cut back a bit.



Normally I don't like buying (or adding) ahead of earnings, but (a) this sector has been beaten down quite a bit and (b) I believe the market is overestimating their US exposure - both these names also have heavy exposure to oil&gas infrastructure buildout. I also have a boatload of cash (25% of fund after this morning's sales), so I need to find something to buy...

I did cut back on this group last week, but I'm looking at charts to show me relative strength. When I see the stock clear a 50 day moving average this tells me smart money (rightly or wrongly) is beginning to warm up, so I'll go along for the ride. To be frank, I like this group just about as much as agriculture and coal, but the market has treated this sector very differently than the former 2 of late.

Long both names in fund and in personal account