Oil and gas/engineering
With all the newly announced oil and gas infrastructure realignment/development, to avoid complete and total geopolitical dependence on hostile regimes, companies like Worley (WOR) and Monadelphous (MND) should have LNG work coming out of their ears, over time.
Mono’s (MND) in our view, is deeply unloved and underappreciated by the market. They’ve done an excellent job of converting the 2014-2015 LNG project work into recurring maintenance reviews. The fact that global exploration and production capex declined by over 80% since 2014 is obviously bad, for Mono’s, but they’ve navigated that headwind as well as one can, I think.
Consequently, the hurdle to generate a “market like” rate of return, is quite low, and it would appear that consensus earnings are tracking ahead of that log-linear required eps growth trajectory (which would be a bullish signal).
Worley is the higher profile, larger, and arguably pre-eminent engineer in the space (up there with Bechtel) and likewise has material leverage to increased project work involving hydrocarbons.
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