KBR, Inc. (KBR)

CAPS=4S
DFA6M= -8.58%

Re-selected. Revisit October 2010

Joel Greenblatt Pick

KBR clicking on all cyclinders since breaking off Haliburton.

A unit of KBR Inc. has been awarded a $2.3 billion engineering, procurement and construction management contract by Chevron Australia Pty Ltd.

Kellogg Joint Venture Group will manage the liquefied natural gas downstream and logistics portion of the Chevron-operated Gorgon LNG Project.

The project plans to develop the Greater Gorgon gas fields, located off the northwest coast of Western Australia.

San Ramon, Calif.-based Chevron Corp. (NYSE: CVX) operates the project with a 50 percent interest, while Irving-based Exxon Mobil Corp. (NYSE: XOM) and Houston-based Shell Oil Co. each hold a 25 percent interest.

Kellogg Joint Venture Group was formed as a partnership between an Australian business unit of Houston-based KBR (NYSE: KBR) and Australian companies JGC Corp., Clough Projects Australia Pty Ltd. and Hatch Associates Pty Ltd.

Scope of the work includes building a LNG facility and a domestic gas plant.

good backlog, no debt, good cash position

The company may be easy for the media/chattering class to hate, but most of that is because of its singular focus on making money. Just look at the balance sheet. With no end in sight in Afghanistan and domestic infra structure just waiting to be built up, should be a great play on the post-recession.

Evil elements:
KBR is a private company that provides military support services. Notorious for its questionable bookkeeping, dishonest billing practices with US taxpayer dollars and no-bid contracts, KBR has violated human rights on the U.S. dollar.

KBR’s dubious accounting in Iraq came to light in December 2003 when Pentagon auditors questioned possible overcharges for imported gasoline. In June 2005, a previously secret Pentagon audit criticized $1.4 billion in “questioned” and “unsupported” expenditures. In 2002 the company paid $2 million to settle a Justice Department lawsuit that accused KBR of inflating contract prices at Fort Ord, California.

Many third-country national (TCN) laborers have been hired by KBR to “rebuild” Iraq. Generally hailing from impoverished Asian countries, they have unexpectedly become part of the largest civilian workforce ever hired in support of a U.S. war. Once abroad, the workers find themselves with few protections and uncertain legal status. TCNs often sleep in crowded trailers and wait outside in scorching heat for food rations. Many lack adequate medical care and put in hard labor seven days a week, 10 hours or more a day.

PEG = 1.26

Look at how much cash they have. Oh, and how much debt they don't. something tells me that's probably a good position to be in for the future.

fair value~~$39.16

MFI Pick

The pitch for this stock can be found on the MF The Stinky Feet discussion board at
http://boards.fool.com/Message.asp?mid=27410303&sort=threaded

Stop by and let us know what you think of this pick.

Zero debt puts KBR at a huge advantage for M&A, contract bidding, and cost controls

Tied to shotty electrical workmanship in US Afghanistan military bases. This is all over the news, and it is going to hurt them in the market.

Seems like momentum is for outperform. Good scope of skills for infrastructure stimulus plans.

KBR still rules in major US Government overseas contracts to build/operate camps. And, they continue to whip once mighty DynCorp's butt on big jobs like LOGCAP. Biggest competitor at moment is PAE, though Lockheed may be looking to sell off PAE which wasn't in Lockheed's range of core competencies anyhow. KBR's major problem, according to credible hall way gossip, is danger of kick backs to foreign governments, and its less than sterling contract execution.

Low relative PE, good star ranking, PEG & 09 PE still below normal - bottom fishing.

$6 of cash per share with no debt on a $15 dollar stock, they can buy themselves.

alot of upside from its previous highs to now and with Afghanistan looking to ramp up, it's likely to get a lion's share of the contracts...