Selling at Fluor Goes Through the Roof
By TERESA RIVAS
Tables: Buyers | Sellers
WITH FLUOR OUTPERFORMING heavy-construction peers and announcing a number of new contracts, insiders at the company have decided to unload a substantial amount of stock.
Since the beginning of the month, five executives have sold more than $4 million in stock, both directly and through options exercises.
On March 6, Chief Financial Officer Michael Steuert sold 10,000 shares for $1.4 million, an average of $144.79 a share. He continues to own 32,302 shares.
On March 7, Senior Vice President Steven Gilbert exercised 3,285 shares for $288,304, an average of $86.81 a share. He sold 10,186 shares for $1.4 million, an average of $140.57 per share. He continues to own 20,029 shares.
On March 6, group executive Jeffrey Faulk exercised 693 shares for $58,358, or $84.21 a share. He sold 4,643 for $650,020, or $140 a share. He continues to own 10,700 shares.
On March 4, group executive John Hopkins sold 4,414 shares for $611,403, an average of $138.44 a share. He continues to own 22,371 shares.
On March 4, director Peter Watson sold 559 shares for $80,988, or $144.88 a share. He continues to own 2,780 shares.
Options exercised by Gilbert and Faulk would have expired at 2016, at the earliest.
All the executives own less than 1% of Fluor stock outstanding.
A spokesman for Irving, Texas-based Fluor declined to comment on the transactions.
"There is certainly more troubling selling [at other companies] than what is going on at Fluor," says Jonathan Moreland, adviser to Ladenburg Thalmann Asset Management on insider strategies. "This stock has rebounded nicely from its near-term bottom in February, which makes the sales look like normal profit-taking."
"This stock is well positioned, but if you're getting in now you have to be betting that it will come in at the high of its earnings-estimate range, because it looks pretty fairly valued by consensus," he says.
Although Fluor has fallen from highs of more than $170 in October, it has kept pace with the Dow Jones U.S. Heavy Construction Index's 57% rise over the past 12 months.
On Wednesday Fluor fell $2.93 to $138.73.
In the new year the stock has posted smaller losses than its peers as it announced a spate of new contracts and posted a robust fourth quarter.
On Feb. 28, Fluor reported that income more than tripled in the fourth quarter on a tax settlement and strong profits in the oil and gas industry. The company said earnings rose to $259.5 million, or $2.82 a share, compared with $80.7 million, or 90 cents a share, a year earlier.
Fluor also boosted its full-year guidance, bumping its 2008 earnings-per-share forecast up by 20 cents a share to $5.10 to $5.50. Analysts' mean estimate was $5.43 a share.
Fluor, which counts coal, oil and nuclear energy markets among its main businesses, has benefited from both rising energy prices and growing interest in nuclear power as an alternative to conventional energy sources.
"Fluor's strong performance and record-setting backlog in the fourth quarter bolsters our conviction in the story," wrote Citi Investment Research analyst Brian Chin in a research report Thursday. "We continue to believe management guidance seems conservative given the robust growth in backlog, and expect that this will lead to upside surprises, particularly in the second half of the year."
Chin upgraded Fluor to Buy from Hold and increased his target price to $190.50 to $158.
The insiders' sales came as Fluor announced two new projects it had taken on.
On March 5, the Mexican construction company Empresas ICA announced that its joint-venture with Fluor, ICA Fluor, won a $100 million contract to build a nitrogen injection plant and power plant for a unit of Sempra Energy.
On Monday Fluor said it had won a contract valued at $1.9 billion to work on Total's Port Arthur, Texas, refinery.
On Feb. 26, Fluor said it was awarded a project-management contract for a significant portion of Repsol's refinery expansion in Cartagena, Spain. Fluor had booked the contract's $1.3 billion value into its fourth-quarter backlog.