Seeking Alpha: Can PowerSecure's Odd Mix Generate Real Cash Flow?

Just on the surface level, PowerSecure (POWR) looks like it should be in some businesses with attractive long-term prospects. The company's distributed generation operations address the dual realities that not as many commercial/industrial sites have backup power as you might imagine and that there are savings to be gained from using on-site generation for peak shaving/demand response. Elsewhere, LED lighting and energy efficiency are almost perennial hot topics, and though utility infrastructure is not necessarily a growth market on its own, transmission & distribution (T&D) work has been lagging long-term demand and PowerSecure is building off of a low base.

Clearly the Street is feeling more cheerful about the name. The shares are up more than 170% over the past year and roughly 300% from the mid-2012 lows, and a small cadre of well-known institutions own worthwhile chunks of the stock (though some of that is for ETFs). While I'm actually more bullish with my numbers than management's own presentation, I'm not quite as bullish as the sell-side at this point - I do believe these shares remain undervalued, but a price target in the $20s might be a bit much right now.

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Can PowerSecure's Odd Mix Generate Real Cash Flow?

Investopedia: Shaw Has Value, But Needs A Spark

Value traps can drive investors to distraction; nothing is quite as frustrating as owning a quality company but seeing the market ignore its long-term virtues because of short-term challenges. Such could be said for Shaw Group (Nasdaq:SHAW). Although the construction of new nuclear plants looks like a non-starter, the company still has a key position in servicing existing plants, not to mention ongoing opportunities in markets like environmental remediation for utilities and more general industrial and manufacturing construction. The question for investors, though, is how much pain they can tolerate in the short run as capex spending seems to be stuck on pause.

A Decent Start to the Year  
Shaw gave some encouragement to its shareholders on Wednesday morning with its earnings release. Revenue fell 2% from the year-ago level, but was in line with analyst expectation. Although the company picked up some business in the Mideast and Latin America, Asia and Europe were notably weaker. Within the segments, not a lot changed - the company's large power business saw revenue fall about 2%, while plant service and environmental/infrastructure traded off above-average and below-average growth.

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Investopedia: Will Obama's Plan Boost Infrastructure Names?

The election cycle is in full swing and with a lagging economy looming large as an issue, President Obama has come out with his own package of proposals to get the economy and job numbers moving in a more favorable direction. One of the centerpieces of the program is another boost in infrastructure spending.

Assuming that the President can get this package through Congress more or less intact (and that is no guarantee), it is worth considering the investment consequences. If billions and billions of dollars work their way through to roads, transit systems and other public works projects, can infrastructure stocks finally get moving in a more positive direction?

The Size of the Bid
Although the details will almost certainly change as bills are debated and amended, President Obama proposed as much as $140 billion in infrastructure spending, with possibly $50 billion being put on a so-called "fast track." The reasons to do this are pretty familiar - the projects themselves will put people to work (both in construction and related industries like steel and concrete) and better infrastructure has typically correlated with improved economic performance.


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Investopedia: Can EnergySolutions Power Up With Nuclear Energy?

Shakespeare may have thought that it was better to try and fail than to never try at all, but Wall Street is seldom so forgiving. While EnergySolutions (NYSE:ES) has a lot going for it as a very rare pure play on nuclear energy services, the company is going through a difficult adjustment. After trying to compete as a tier-1 player, the company looks to be retrenching, and near-term earnings performance is not looking robust. Nevertheless, patient investors may want to keep an eye on this name as there may be more power to the business than near-term results suggest. (For background reading, check out The Biggest Nuclear Operators In The United States.)

A Tough End to the Year 

Due in part to some accounting readjustments, the fourth quarter of this fiscal year was not very strong for EnergySolutions. Revenue was effectively flat, gross profit was down 15%, and EBITDA fell 6%. None of that is likely to impress analysts, even on an adjusted basis.

Looking around on a division basis does not really help the picture much. The company's international business, its largest component, was basically flat on a revenue basis, but operating income fell more than 20% on lower fees from a major contract. Elsewhere, the commercial services business saw revenue jump, but operating income swung to a loss anyway.

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