Tom Reese/Paul Rubillo, Dividend.com
Fluor Corp (FLR) has a lot riding on commodity price movements, and the engineering and construction stock’s latest negative price action is a tell-tale sign of this dependency.
The drop in commodity prices is a concern for a firm like Fluor Corp, whose backlog of construction projects can disappear on a dime. The stock has been a tremendous winner since the beginning of 2007, and is clearly a company that can be the sector leader for many years to come. As in any business that is involved in cyclical markets, however, past performance is no guarantee of future results.
The Bottom Line
Let’s break down the potential near term scenario. We removed the stock from our ''Recommended'' list back on Aug. 12 at $76.18 a share. The stock has fluctuated in a tight range ever since. The stock needs to hold recent lows of $71.36 a share, or it could potentially drop down to this year’s low of $53.50. If the stock can stay in the mid-70’s, and sustain those levels for a bit, then it may take a shot at a higher key level, which is in the $87-88 range. This stock, like other ''hot money'' commodity-related names, is another one we feel is better suited for investors that have a shorter-term time frame and can be nimble enough to move in and out of the stock quickly.
Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system here.
Related Stories
