Earnings Trade: Fluor-FLR — Bet On This Earnings Superstar

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Fluor Corp. (FLR), the engineering and construction giant, is a stock that should make a great bullish earnings trade.

The company is scheduled to report after the close on Monday, Aug. 10.

The shares have jumped more than 10% on average in just one day following the past three earnings reports.

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Maybe that’s because the company has beaten the consensus earnings forecast by an average of 15% each time.

Maybe it’s also because Fluor derives a hefty chunk of revenue from major government contracts. And we all know how the government loves to spend money.

Whatever the reason, the company sits in a prime spot while the economy struggles.

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The major problem right now is FLR’s chart, which is showing strong resistance at the $55 level. That spot marked tops in June and July, and has been troublesome this week, as well.

Other than that, nothing should stand in the stock’s way.

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Sentiment toward Fluor is mixed. Ten of 18 analysts rate the shares a “buy,” which is hardly an overwhelming endorsement.

The put/call ratio sits in the middle of the past year’s range, but it’s been on the decline for the past month, a sign of gaining optimism and buying power.

If the shares can break free of the shackles at $55, I like Fluor as a bullish play. With a solid earnings history at its back and sentiment that has further to unwind into buying, FLR looks to be a solid call trade.


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Article printed from InvestorPlace Media, https://investorplace.com/2009/08/earnings-trade-fluor/.

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