Why Chicago Bridge and Iron (CBI) Stock Is A 'Buy' At TheStreet

NEW YORK (TheStreet) -- TheStreet Ratings team rates Chicago Bridge and Iron Co. (CBI) as a "buy" with a ratings score of B+.

Shares of Chicago Bridge and Iron are down -5.82% to $65.92 in early afternoon trading on Tuesday.

TheStreet Ratings Team has this to say about their recommendation:

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"We rate CHICAGO BRIDGE & IRON CO (CBI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 12.9%. Since the same quarter one year prior, revenues rose by 30.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • CHICAGO BRIDGE & IRON CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHICAGO BRIDGE & IRON CO increased its bottom line by earning $4.18 versus $3.07 in the prior year. This year, the market expects an improvement in earnings ($5.09 versus $4.18).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Construction & Engineering industry. The net income increased by 164.7% when compared to the same quarter one year prior, rising from $33.61 million to $88.95 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Construction & Engineering industry and the overall market, CHICAGO BRIDGE & IRON CO's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CBI Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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