2 Infrastructure Firms With Low Valuations

Revenue growth is starting to return in a big way at some companies involved in building infrastructure and numerous companies in the sector sell for a fraction of what they did in 2007. Here are two companies with accelerating revenue growth and low valuations that are significantly under analysts’ price targets.

Tutor Perini (TPC) –

Tutor Perini Corporation, together with its subsidiaries, provides diversified general contracting, construction management, and design-build services to private clients and public agencies worldwide. It operates in three segments: Civil, Building, and Management Services.

(Business description from Yahoo Finance)

4 reasons TPC is a long term bargain at just over $15 a share:

1. The median analyst price target on Tutor Perini is $24. It is selling at a forward P/E of just over 6.

2. The stock had a $70 price back in 2007 when it $3.54 a share (See Chart)

click to enlarge

3. The company is selling at the bottom of its five year valuation range based on P/E, P/S, P/B and P/CF.

4. Revenue growth is accelerating. TPC is expecting 18% growth in sales in 2011 and consensus is for 21% growth in revenues in 2012.

Terex Corporation (TEX) –

Terex Corporation manufactures and markets machinery products, equipment, and related replacement parts and components for construction, quarrying, mining, shipping, transportation, refining, energy, and utility industries.

(Business description from Yahoo Finance)

4 reasons Terex has long term potential at just under $17 a share:

1. The mean analyst price target on Terex is $22 and S&P has a $24 price target on TEX. It is selling at a forward P/E of just over 10.

2. The stock had a $90 price back in 2007 when it $5.85 a share (See Chart)

3. The company is selling near the bottom of its five year valuation range based on P/S, P/B and P/CF.

4. Revenue growth is booming. Terex is expecting more than 40% growth in revenues in 2011 and consensus is for over 20% growth in sales in 2012.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in TEX, TPC over the next 72 hours.