24/7 Wall Street has decided to take a look at the biggest companies which will lead in the rebuilding of America’s ailing infrastructure.  A recent report from Infrastructurereportcard.org gave the United States a grade of a “D” and said that the 5-year investment need was $2.2 trillion. What the real tally is may not matter, but America has to rebuild.

In October, Amtrak rolled out a $100+ billion plan to rebuild its network.  President Obama is expected to call for a transportation infrastructure plan in the coming weeks. Finding all of the nation’s infrastructure winners is too long and too daunting of a task. General Electric and many of the nation’s largest diversified companies are all beneficiaries, and some of the key winners are likely to be foreign entities which employ thousands of workers in America.

The companies featured are the ones behind the design, testing, manufacturing, consulting, engineering, and construction of major projects.  We wanted players that will rebuild the water systems, roads, highways, bridges, airports, rail, levees, waterways, utilities, and buildings around the major infrastructure projects ahead.

These are the companies that 24/7 all Street is most focused on for the American infrastructure revival.

1. AECOM Technology Corporation (NYSE: ACM) offers architecture and engineering design services.   Target markets are transportation, environmental, energy, and it serves projects in key infrastructure areas like highways, airports, bridges, wastewater facilities and power transmission and distribution.  AECOM has a market value of about $3.5 billion and it is expected to have 2011 revenues of close to $8.4 billion. It as 50,000 employees.

2. Chicago Bridge & Iron (NYSE: CBI) is technically Dutch now but is a key infrastructure player with 16,000 employees worldwide that executes more than 600 projects a year with a focus in oil & gas infrastructure, steel plate structures in storage and containment and plant manufacturing.  The company has a market value of more than $3.3 billion and it recently forecast that 2011 revenues are expected to reach $4.3 billion to $4.7 billion.  If America is going to get serious on its energy infrastructure ahead, CB&I stands to greatly win.

3. Emerson Electric Co. (NYSE: EMR) might sound like an electric utility but it is in engineering and project management services for many industries and many government agencies.  It manufactures major equipment for utilities and industry, power and telecom, heating and air-conditioning, network power, climate technologies, and more.  It also has well over 100,000 employees.  The company has a market value of roughly $44 billion and it just recently gave a forecast of 14% to 17% growth to $24 to $24.5 billion in 2011 revenues.

Abercrombie & Fitch Co. (NYSE: ANF) Added to Goldman Sachs Conviction Buy List.
Air Products & Chemicals Inc. (NYSE: APD) Reiterated Buy and raised target to $105 at Jefferies.
Amazon.com Inc. (NASDAQ: AMZN) Reiterated Neutral but Raised Target to $165 at Credit Suisse.
Arch Capital Group (NASDAQ: ACGL) Cut to Underweight at JPMorgan.
Buffalo Wild Wings Inc. (NASDAQ: BWLD) Raised to Strong Buy at Raymond James.
Cisco Systems Inc. (NASDAQ: CSCO) Raised to Outperform at Oppenheimer.
Corning Inc. (NYSE: GLW) Reiterated Buy with $24 target at BofA/ML.
Elan Corp. plc (NYSE: ELN) Raised to Buy at UBS.
EMBRAER (NYSE: ERJ) Started as Buy at Goldman Sachs.
Hess Corporation (NYSE: HES) Raised to Market Weight and $80 target at Credit Suisse.
Jacobs Engineering Group Inc. (NYSE: JEC) Raised to Buy at Canaccord.
Leap Wireless International Inc. (NASDAQ: LEAP) Cut to Hold at Auriga.
Motorola Inc. (NYSE: MOT) Reiterated Buy at BofA/ML.
OGE Energy Corporation (NYSE: OGE) Started as Outperform at Wells Fargo.
Royal Bank of Canada (NYSE: RY) Cut to Market Perform at KBW.
Sandridge Energy, Inc. (NYSE: SD) Raised to Buy at Stifel Nicolaus.
Wimm-Bill-Dan (NYSE: WBD) Raised to Neutral at Goldman Sachs.

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JON C. OGG

Deere & Co. (NYSE: DE) generates the highest operating margin in the industry. During the third quarter of fiscal 2010, the company delivered earnings per share of $1.44, surpassing the Zacks Consensus Estimate of $1.25 and outperforming its peer Caterpillar Inc. by $0.22.

With an intact farming customer base and improving economic conditions, the company’s sales are ready to rebound significantly. Moreover, Deere is likely to receive a boost from the new Tier4i engine developed recently.

The stock is trading at a discount of 17% to the peer group, based on forward earnings estimates. Our long-term Outperform recommendation indicates that it will perform well above the market. Our target price of $93.00, 20.6x 2010 EPS of $4.51, reflects this view.  FULL DEERE ANALYST REPORT

Zacks noted on Jacobs Engineering Group Inc. (NYSE: JEC):  We have downgraded our recommendation on Jacobs Engineering (NYSE: JEC) from Neutral to Underperform based on the company’s continuous decrease in backlog since the beginning of fiscal 2010, which is expected to negatively affect its top-line results in fiscal 2011.

Hence, we reduce our fiscal 2011 estimate by 3 cents. The stock is cyclical in nature, and thus the sluggish economic environment, which has reduced the client’s spending power, was the prime reason for the decrease in backlog.

Large investors fear to infuse capital in the unstable market conditions. Moreover, the company faces immense risk as it operates in a highly-competitive environment.  FULL JACOBS ENGINEERING ANALYST REPORT

Grainger’s third quarter adjusted EPS improved 32% year over year to $1.99 and revenues jumped 19% to $1.9 billion, outperforming the Zacks estimates; Grainger elevated its sales growth guidance to a range of 14%-15% and its EPS guidance to a range of $6.40 to $6.70. Grainger remains focused on expanding its product offering and has the financial flexibility to further invest in growth opportunities, increase dividends and reinvest capital through share repurchases.  Gradually improving economic activity, market share gains, benefits from growth investments, share repurchases and strategic acquisitions should lead to strong earnings growth in 2010 and 2011.  FULL REPORT FROM ZACKS

The downgrade from Zacks in Jacobs Engineering is based on a continuous decrease in backlog since the beginning of fiscal 2010 which will negatively affect its top-line results in fiscal 2011.  The stock is cyclical in nature, and thus the sluggish economic environment, which has reduced the client’s spending power, was the prime reason for the decrease in backlog.  Large investors fear to infuse capital in the unstable market conditions and it faces immense risk as it operates in a highly-competitive environment.  FULL REPORT FROM ZACKS

Boeing Co. (NYSE: BA) Raised to Outperform at Oppenheimer.
CONSOL Energy (NYSE: CNX) Raised to Overweight at JPMorgan.
General Electric Co, (NYSE: GE) Target Raised to $20 from $19 at Bernstein.
Jacobs Engineering Group (NYSE: JEC) Raised to Overweight at JPMorgan.
NRG Energy, Inc. (NYSE: NRG) Removed from Conviction Buy List at Goldman Sachs.
Polycom, Inc. (NASDAQ: PLCM) Raised to Outperform at William Blair.
Schlumberger Ltd. (NYSE: SLB) Cut to Outperform at CLSA.
Solar Capital Ltd. (NASDAQ: SLRC) Started as Neutral at JPMorgan; Started as Buy at Citigroup and BB&T.
Texas Instruments Inc. (NYSE: TXN) Raised target to $21 from $20 but Maintained Sellat Auriga.
Whole Foods Market, Inc. (NASDAQ: WFMI) Cut to Neutral at Longbow Research.

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JON C. OGG

After reviewing this data, 24/7 created a list of The Twenty Companies Wall St. Can Trust The Most. The firms are ranked based on their Accounting and Governance Risk scores.

The list represents companies that have practices which should be emulated by every public company that wishes to serve the needs of its shareholders by presenting accurate financial data and providing conservative management of shareholder’s investments.

The Twenty Companies Wall St. Can Trust The Most:

Methodology: The Audit Integrity Accounting and Governance Risk (AGR) rating is a forensic measure of the transparency and reliability of a corporation’s financial reporting and governance practices. The focus of AGR analysis is on identifying the measures most highly associated with fraud, and quantifying those risks for interested stakeholders in relation to company stock price, securities litigation, and major restatement probabilities.

Audit Integrity applies over 100 accounting and governance metrics to a company’s publicly-filed information. The resulting calculation produces the AGR, a percentile score ranging from 0 to 100, with corresponding ratings from Very Aggressive to Conservative.

Companies rated Very Aggressive or Aggressive have proven to be much more likely to face class action litigation and financial restatements, and to suffer severe equity loss. Conversely, those companies that have been consistently rated Conservative have been shown to be the most trustworthy.

AGR significantly improves the predictivity of traditional risk models.

The AGR and its underlying metrics are used by regulators, auditors, insurance companies, investment managers, and corporations, and are often incorporated in reporting by major financial media.

Douglas A. McIntyre

First Solar, Inc. (NASDAQ: FSLR) is another unusual suspect to watch this week.  The downgrade from Jefferies on Friday made this the worst performer of all in the sector and only added insult to injury from the prior week’s slam by Barron’s.  Solar and wind companies are increasing lobbying efforts in hopes of capturing up to $10 billion more in subsidies, but the charts do not trust the outcome.  First Solar has a totally broken chart now as it is down 40% from highs in May and has now actually traded under the lows right before that gap-down in late February when the market was making its meltdown.

Genzyme Corp. (NASDAQ: GENZ) is going to be one to watch this coming week.  This has recovered off of lows in recent sessions and Leerink Swann just raised its rating on Friday to an “Outperform” on its valuation versus prospects ahead after 2009.  This one also made our BioHealthInvestor.com stock screen review of biotech stocks with unusually low P/E ratios and other cheap valuation metrics (others noted are AMGN, AOB, BIIB, CEPH, CBST, and PDLI).  Genzyme gave its highest close on Friday since July 30, making it a chart watcher stock as well.

Geron Corp. (NASDAQ: GERN) will be one to watch this coming after its bad news this last week about an FDA clinical hold on its spinal cord injury testing. This put a hex on the sector, but there was something interesting. This lost 10% on Tuesday’s news, but despite the gap-up on Wednesday not holding, this never did break back under the $6.49 closing price of Tuesday.  It only hit it and closed at $6.52.  That is hardly an endorsement, but as this is the leader in the speculative stem cell stock group it will be a key one to watch this next week.

Jacobs Engineering Group, Inc. (NYSE: JEC) represented a chart break-out.  But as Joe Kunkle of OptionsHawk.com told us, there was unusual options trading in this and it has in the past been considered a possible buyout target.  The OCT$50 CALLS were noted as active as lots of 1,000 and 1,500 traded but the contracts ended up trading 3,990 contracts versus an open interest of 1,617 contracts. There was also unusual activity in the AUG$45 CALLS but that was likely a close-out trade as the August series expired yesterday.

Sears Holdings Corporation (NASDAQ: SHLD) was given insult on top of injury.  The earnings report, a loss of $94 million, was worse than expected but also came after the deadline that Wall Street and common investors are demanding to see proof of the turnaround.  It isn’t there and patience may be running thin with Eddie Lampert and his promises.  While it added over 1% on Friday to close at $66.02, this one lost 11.8% of its value on Thursday after its earnings and was the worst retailer of the lot.  Now Barron’s gave it the cover story as “Washed Out”… with an inability to keep cutting costs, lower margins. lower market share, lower profitability, and lower cash flow ahead.

SIRIUS XM Radio Inc. (Nasdaq: SIRI) will be one to watch this coming week.  There is supposed to be a new hardware release this coming week and the talk is that this is a SkyDock plug-in device for helping iPods and iPhones become satellite-radio receivers.  The company also was a likely huge winner in the cash for clunkers program.  SIRIUS traded up every day this last week except Monday and volume grew every single day.  It closed at $0.54 Monday and ended the week at $0.70, a gain of almost 30%.  Not bad at all.

Salesforce.com (NYSE: CRM) took the chart and news award as a “best of” this last week.  The closed up significantly higher on Friday and at levels not seen since last September.  There could be some “back-and-fill” trading initially, but after Salesforce.com forgot about the recession by beating earnings and raising guidance it could run more than 10% more from Friday’s close before hitting 52-week highs.

Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) is going to have its last full trading week before everyone starts to opine about an upcoming FDA decision for its ZEVALIN, its non-Hodgkin’s lymphoma radio-immunotherapeutic, is due.  This will be a make or break event.  We have some solid background data on what happened here that brought up this as an unexpected issue, and BioMedReports.com has an outlook on the issue coming up.

MACRO-EVENTS FOR THE WEEK AHEAD:

Earnings season is effectively ending after this last week.  We still have many retail earnings releases coming due this week, but the major tech and industrials and the larger index components have just about all reported earnings by now.

On economic numbers, we have Durable Goods and Consumer Confidence both due Tuesday morning, New Home Sales for August on Wednesday, and the first revision to Q2 GDP out on Thursday.

If you want weekly reminders in case you miss “the unusual suspects” or if you want updates on guru investors like Buffett or Icahn or Soros, or if you like data on IPO’s, secondary, offerings, key analyst calls, and merger activity… feel free to join our open email distribution list that goes out several times per week.

JON C. OGG
August 22, 2009

• BB&T (BBT) Raised to Market Perform at KBW.
• Expeditors International (EXPD) Raised to Neutral from Sell at UBS.
• Fluor (FLR) Started as Buy at Jefferies.
• Jacobs Engineering (JEC) Started as Buy at Jefferies.
• J. Crew (JCG) Raised to Equal Weight at Barclays.
• Nokia (NOK) Raised to Hold from Sell at Societe Gednerale.
• Sigma-Aldrich (SIAL) Raised to Neutral from Sell at Goldman Sachs.
• Virgin Media (VMED) Raised to Overweight at JPMorgan.

Jon C. Ogg
January 23, 2009

The company expects to continue providing engineering, procurement,construction, and project management to offshore drilling projectsaround the world. The business group president acknowledged that theoil business is in a funk right now, but "our clients will continue tohave the need to go to more remote and harsh environments to access oil& gas."

He’s got that right. Drilling, if it ever happens, off the north coastof Alaska or Russia is an expensive and time-consuming process. Thereare very few companies with expertise in getting those projectscompleted. Interestingly, the most experienced are probablyStatoilHydro (NYSE:STO) and Exxon Mobil (NYSE:XOM). Statoil for itsNorth Sea projects, and Exxon for the Sakhalin-1 project off the eastcoast of Russia.

But companies like Fluor or Jacobs Engineering (NYSE:JEC) or FosterWheeler (NASDAQ:FWLT) or KBR Inc. (NYSE:KBR) could compete for theengineering part of these projects independently of the big oilcompanies. These guys work for a fixed rate; the oil companiestypically want a piece of the action. One of the reasons every oilcompany wants the US to open the north coast of Alaska and the outercontinental shelf of the lower 48 is because the US is one of the lastplaces in the world where a big oil company can negotiate a productionsharing deal just like in the good old days. And unless its the automakers, no company yearns for the good old days more than a big oilcompany.

But Russia, for example, is perfectly happy to have a company likeFluor come in and do the design, engineering, and construction work andthen leave. Welcome to Russia; now go home.

The other danger in designing these harsh-climate projects is that theproject cost will outpace the price of oil. That’s happening already insome places. But in the long run, and nearly everything in the oilbusiness is long run, crude prices will rise and these projects willpay off for Fluor.

Fluor’s share price has fallen about 56% from its 52-week high. But thecompany, with third quarter revenues of $5.67 billion, has virtually nolong-term debt. Competitors Foster Wheeler and Jacobs are off 52-weekhighs by 73% and 59%, respectively.

Paul Ausick
December 4, 2008

• Aetna (NYSE: AET) cut to Sell at Goldman Sachs.
• Alcoa (NYSE: AA) Raised from Sell to Hold at Soleil.
• Arch Coal (NYSE: ACI) Raised to Buy from Hold at Citigroup.
• Jacobs (NYSE: JEC) raised to Buy from Hold at Morgan Joseph.
• GeoEye (NASDAQ: GEOY) started as Buy at Soeil.
• L3 Communications (NYSE: LLL) Raised to Outperform from Neutral at Cowen.
• Nucor Corp. (NYSE: NUE) Raised to Sector Perform from Sector Underperform at CIBC.
• NVIDIA (NASDAQ: NVDA) Cut to Neutral from Overweight at JPMorgan.
• Peabody (NYSE: BTU) Raised to Buy from Hold at Citi.
• UnitedHealth (NYSE: UNH) cut to Neutral at UBS.

We also saw RBC raise the Communication Towers Sector.

Jon C. Ogg
July 3, 2008