Expected stimulus spending boosts construction industry stocks

Thursday, 4 December 2008 00:11 by Guest

I was scanning for the last 5 day active industries using the Industries>Last 5 Days from this website. The top 6 industries returned an average Bull/Bear ratio of approximately 1.4. The Bull/Bear ratio is based on the number of Bullish stocks over Bearish stocks. So for the last 5 day with a ratio of 1.4(3:2) that means the number of bullish stocks versus the bearish are nearly the same.

Number 7 in the list is the "Heavy Construction" industry/sector. Surprisingly, there were 7 bullish stocks and 1 bearish stock for that 5 day period. So that's Bull/Bear ratio of 7(7:1). The 7 bullish stocks are FLR,  GLDD,  GVA,  INSU,  MTZ,  OMGI,  STRL.

This unusual pattern (in comparison with the other industries) deserves another investigation. Below I found this article:

Shares of engineering and construction companies including Granite Construction Inc., URS Corp. and Fluor Corp. posted double-digit gains Monday on speculation about President-elect Barack Obama's economic stimulus plans.

The construction industry has been one of the hardest hit in the current downturn, with unemployment running at about 10.8 percent. Obama hasn't outlined new public works spending plans yet but members of his team have been reaching out to state and local officials indicating that it will likely be part of his plans to boost the economy next year.

Shares of Watsonville-based Granite Construction (NYSE:GVA) rose 22 percent Monday to close at $36.45 and was up about 6 percent Tuesday afternoon at $38.58. Stock in the company, which has a large presence in the Sacramento area, had lost about half of its value when it hit a 52-week low of $21.20 on Oct. 24.

To read the full article, click this link.

To research more about the stocks, click here.

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