Does Chicago Bridge & Iron Company N.V. Sit on Shaky Footings? (CBI)

Chicago Bridge & Iron Company N.V. (NYSE:CBI) posted a disappointing quarter and since then estimate has dropped.  CBI stock is currently a Zacks Rank #5 (Strong Sell) and the question becomes if this is still a “Trump Stock” or not.

Does Chicago Bridge & Iron Company N.V. Sit on Shaky Footings? (CBI)Chicago Bridge & Iron Company provides conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management, and environmental services worldwide. The company was founded in 1889 and is headquartered in The Hague, the Netherlands.

CBI’s Most Recent Report in Detail

The first thing that jumps out at me on the quote overview page is that while this is a Zacks Rank #5 (Strong Sell) it also has an “A” for the value style score and a “B” in growth.

The 7x forward earnings multiple is something most value investors can get their head around, so maybe this might still be a good play after all.

However, the most recent quarter was a huge miss.  EPS of 85 cents per share were 42% below the $1.48 expectation.  Revenues came in lower than expected by about 7%.

Normally, a big miss like this would send CBI stock tumbling lower, but it only fell 3.7% in the session following the release.

Is CBI a Trump Stock?

This was certainly a Trump Stock before this report.  The stock was about $28 before the election and the idea of a lot of infrastructure spending sent this stock to $36.  Now we have given back a lot of that move.

Company guidance was mostly inline with what Wall Street was looking for, so there is no help there. One thing that does concern me is the 7% short interest. That number looks pretty low right here, but for a move like this I would think that the shorts would have been all over this story and running that number to at least 10% or more.

With the market soaring higher, going short a name like this probably isn’t your best bet.  The idea here is that it is a Zacks Rank #5 (Strong Sell) because earnings estimates have moved lower.

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