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A way to profit from crumbling bridges? / a crumbling dollar / a bear market rally / mysterious crumbled bills

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July 28, 2008 – Comments (9) | RELATED TICKERS: URS

Today is day one of my scheduled four day "stay-cation."  My family and I drove across the Tappan Zee Bridge to visit the The Maratime Aquarium in Norwalk, Connecticut (we had a great time).  The reason that I mentioned the Tappan Zee Bridge is when we were on it I thought to myself, "Man this bridge is really a piece of ship.  I hope that it doesn't collapse."  A timely report on the current state of bridges in the United States was published by the American Association of State Highway and Transportation today.  It claims that the United States' bridges are in such a state of disrepair that it would cost more than $140 billion to repair all of them if work started immediately.

I realize that the government is currently strapped for cash and that there isn't much money around to find major projects, but looking down the road if the likely next president, Obama, is able to shift funding from the war in Iraq to spending at home it might go to infrastructure projects like repairing our country's crumbling bridges.  If this were to happen, what companies would benefit?  One that comes to mind is URS Corp. (URS). 

URS provides planning, design, engineering, program management, and technical assistance, for construction projects.  There are a lot of trends going on right now that could potentially benefit this company, including our country's inadequate power generation capacity, the need for new water / wastewater treatment plants, the big money that is being earned in the oil and gas sector, and the aforementioned need for bridge building and repair.

URS' stock has been basically flat over the past six months, which is pretty impressive in today's market.  Its P/E is currently 17.5, which isn't bad for a company that has been hitting analysts' earnings targets and is expected to grow by almost 19% in 2009.  I plan on adding URS to my CAPS portfolio.


The decrepid Tapan Zee Bridge

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Quick Hits

- White House projects record deficit for 2009:  Congratulations on setting a new record guys.  Huge deficits are just the way to create the strong dollar that you claim to believe in.

No Recession? No Inflation? Don't Make Me Laugh!: A great post by Barry Ritholtz over on The Big Picture.  Here's a great quote:

"The anticipated bear market bounce in Financials has led to the usual fools' chorus that the worst is behind us, the economy is on the mend, and a recession is avoided. If their song sounds familiar, it is because you heard the same tune with the home builders, and the same melody with the monoduoline insurers.

For those with their head in the sand, here is a broad and varied look at where the economy is contracting. Note that this isn't a cherry picked list of negatives -- it is the crème de la crème of corporate America, ranging from consumer to finance to industrial to transports, and includes such stellar names as Apple, Toyota, American Express, UPS, Catepillar, Costco and JPMorgan. (There's not a slouch in the bunch!)"

Buried loot a mystery for authorities: This is one strange story.  Excuse me while I go spend some quality family time digging holes in my back yard looking for lost millions of dollars.

 

Deej

No position in URS

One of the cool poison dart tree frogs that I say this afternoon.

9 Comments – Post Your Own

#1) On July 28, 2008 at 5:36 PM, colonelnelson (42.11) wrote:

Here is a nice, short article from Reuters which neatly sums up both candidates' positions on strengthening (and spending on) U.S. infrastructure:

http://www.reuters.com/article/topNews/idUSN0124610820080701?virtualBrandChannel=10179

In very short summary, McCain = nuclear + electric grid improvements; Obama = biofuel, clean coal, renewables, roads, bridges & rail.

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#2) On July 28, 2008 at 5:49 PM, abitare (31.77) wrote:

lol, the US is borrowing $1-2 billion a day and selling every asset it owns to foreigners (Budwiser, Chrysler building recently). Mostly for oil consumption.

How much higher do you want this to go up?

http://bp3.blogger.com/_rWY3qGfe6gc/SI1dtCRoXGI/AAAAAAAAA5o/FCp7-0EiyKI/s1600-h/Picture+1.png 

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#3) On July 28, 2008 at 8:33 PM, QualityPicks (78.76) wrote:

I'm still amazed, how long will it take the government to realize that bail-outs=throwing good money away. Believe me, if it made economical sense to bail-out these companies, private corporations would be doing it in most cases. Investing in infrastructure is a much better use of our money, than trying to artificially keep home prices unaffordable from renters that have been meaning to buy a home for many years.

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#4) On July 28, 2008 at 8:49 PM, TMFDeej (99.43) wrote:

Great article.  Thanks for the link, colonel.

Deej 

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#5) On July 29, 2008 at 3:23 PM, DemonDoug (81.27) wrote:

Hey Deej, weren't you the one banging the drums on restaurants that were going to get hit hard?  Or was that someone else...

 

Bennigan's, Steak & Ale Close,
File for Bankruptcy Protection

 

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#6) On July 29, 2008 at 3:44 PM, TMFDeej (99.43) wrote:

That was me, Doug.  Thanks for the info.  I'm still very down on restaurants, but I have closed all of my real-life shorts of them.  BTW, I've been taking a close look at and am strongly considering establishing a position in a company that you are very high on.

Deej 

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#7) On July 29, 2008 at 8:48 PM, DemonDoug (81.27) wrote:

Deej, I would like your input on BQI.  Oilsands Quest - BQI

As far as the company I'm high on, feel free to private message/email me.  I'm assuming that's not against Fool disclosure rules?  I'll blackout myself if need be.

The markets this year seem to be more and more disconnected with reality.  I wonder if the closure of the Enron loophole actually is having an effect on driving down oil prices.  I still see oil at 200/bbl by 2010, and I won't diverge from that prediction unless someone in charge gives Bernanke the boot and installs an Austrian economist as the Fed Chairman.  I'm actually hoping oil does get around to 80/bbl again, because if it does, holy schmoly at that point I'm taking all my sideline cash and going all in on about a half dozen of my favorite oil plays.

I feel the chance of this happening is about the same chance as me scoring a date with Giselle Bundchen.  And seeing as how I'm not a 3-time Super Bowl winning quarterback, that's just not damn likely.

Anyway definitely big props on the restaurant call.  I know a bunch of players have been talking about retail going down (TDRH especially), and I think dwot has also mentioned restaurants going down, but not too many are putting their money where their mouth is.

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#8) On July 30, 2008 at 9:17 AM, TMFDeej (99.43) wrote:

Thanks Doug.  I don't follow pure oil sands plays very closely, I personally prefer conventional plays, particularly ones that are using the fairly high prices that we are currently seeing to pay down their debt and to raise their hedges.  if they have oil sands exposure...that's great. 

As you do, I strongly believe that the long-term price of oil is going higher.  Unfortunately, it is impossible to say exactly when that will happen.  Oil sands have HUGE upside if the price of oil explodes...however they will get hurt much, much worse than more conservative conventional plays if there is a temporary blip that drops oil below $100 for several months.

Deej

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#9) On October 17, 2008 at 1:44 PM, McTwidget (< 20) wrote:

I'm sure this post is long since off your radar, but I just stumbled across it today.

First, a useless fact:

I currently am employed at URS in Maryland.  And I'm not sure you realized this connection, but URS, specifically my office, worked on the design for the pier protection (protection in case of ship collision) at the Tapanzee Bridge.

Second, being employed at URS for 6 years now I've noted the majority of the "growth" here is through acquisitions of other firms, roughly equivalent in size.  And since URS is now one of the largest engineering firms worldwide I don't know how they can maintain a growth rate even close to resembling their past.  Let me also comment that I have never even glanced at a URS financial statement, so I'm speaking totally off the cuff here about generalities I've noticed.

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