This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Goldman's 6 Best Industrial Stocks for 2011

3. Chicago Bridge & Iron (CBI) provides engineering, procurement and construction services for oil-and-gas infrastructure projects.

Goldman views Chicago Bridge & Iron as a levered oil play. Crude oil is trading above $90 a barrel, currently, and demand is growing amid the global recovery. Engineering and construction backlogs are inflecting and Goldman expects investors to start paying higher multiples for stocks in the sector, with Chicago Bridge & Iron offering the most upside. As the recovery progresses, this late-cycle group will rally.

Furthermore, Chicago Bridge & Iron's stock is undervalued, trading at a trailing earnings multiple of 19, a forward earnings multiple of 15 and a cash flow multiple of 15, 35%, 36% and 50% discounts to industry averages. The company has a pristine balance sheet, with $361 million of cash and equivalents and $121 million of debt at third-quarter's end. The company will release fourth-quarter results on Feb. 22. Most recently, it announced $90 million of work booked for the Kearl oil sands project, which missed Goldman's full-year estimate of $600 to $700 million.

Still, Goldman expects the company to book significantly more business as result of the Kearl project. According to Chicago's management, Imperial Oil "has yet to fully release Chicago Bridge & Iron's potential scope on the project." Thus, Chicago will miss its 2010 award guidance when it reports results in two weeks, but its "earnings story is intact." The stock receives "buy" ratings from 71% of researchers in coverage. Macquarie, an energy-focused bank, forecasts that the stock will advance 45% to $50.

4 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,943.81 +28.74 0.17%
S&P 500 1,967.57 +2.89 0.15%
NASDAQ 4,415.49 +19.2860 0.44%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs