Should You Buy It? Quantifying Quanta Services
Can Quanta Services (PWR) add some oomph to your portfolio?
The Houston-based company helps electric and gas utilities maintain network infrastructure, which accounts for about two-thirds of its revenue. Quanta Services also helps cable television and telephone providers build and maintain their networks.
Fidelity Investments, formerly the company's largest shareholder, said last month that it cut its Quanta position from 13.8% to 5.5% of the shares outstanding (without giving a reason). That news, coupled with fears that energy transmission growth could slow along with the broader economy, has sent the stock down 2.2% for the year, closing Wednesday at $20.48.
Amid these misfortunes, on Jan. 29, JPMorgan upgraded Quanta from neutral to overweight. The analyst cited the potential for the company to generate 15% to 20% annual earnings growth over the next three years, as utilities face increased public pressure to upgrade their aging networks.This is an interesting stock story, one that's right up my alley. My prime role here at TheStreet.com is to run the Value Investor service, where I routinely analyze stocks like these. (Click here for a free trial to
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