BOSTON ( TheStreet) -- Construction and engineering, typically a boom-and-bust industry, has attracted big investor money this year as worldwide demand for new infrastructure and energy projects propel earnings.
Shares of companies in the construction and engineering (C&E) sector, such as Fluor (FLR) and Jacobs Engineering (JEC), have jumped an average of 13% this year versus 5.4% for the S&P 500 Index. That's the fifth-best-performing industry among more than 100 tracked by Standard & Poor's. C&E, a sub-industry of the industrials sector, is up 50% over the past 12 months.
Those returns are indicative of the big flow of funds going into developed-equities markets in the U.S., Japan and Europe, and out of emerging markets over the past few weeks. Fund-flows tracking firm EPFR Global recently said $47 billion flowed into developed markets, and the second week of February had the biggest inflows into those markets in over 30 months.
C&E includes multinational civil-engineering companies and large-scale contractors, but excludes homebuilders. These firms are seen benefiting from new power generation projects or improvements to existing ones, including coal-fired plants, oil & gas, and nuclear power plants as those firms have increased their capital spending budgets in the face of rising oil prices.Another driver should be government work. President Obama has a $50 billion infrastructure plan to rebuild roads, railways and airport runways, and separately, last year Congress approved $45 billion of highway construction funds, a 10% increase from 2010. Additionally, Congress is considering a new $450 billion transportation bill. Here are five of the industry's biggest companies that should benefit from these growth trends:
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV