QUOTE AND NEWS
Market Intelligence Center  Dec 5  Comment 
Quanta Services Inc. (PWR) traded between $28.95 and $29.87 before closing at $29.62 Thursday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Feb. '15 $29.00 covered call...
Forbes  Dec 4  Comment 
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy -- they expect to make money.  So let's look at two noteworthy recent insider buys.
TheStreet.com  Dec 1  Comment 
NEW YORK (TheStreet) -- Shares of Quanta Services Inc  are falling sharply, down 7.8% to $28.12 on heavy volume in midday trading Monday, after the contracting services company had its rating cut to "hold" from "buy" by analysts at BB&T...
Forbes  Dec 1  Comment 
In early trading on Monday, shares of Newmont Mining (NEM) topped the list of the day's best performing components of the S&P 500 index, trading up 5.4%.  Year to date, Newmont Mining has lost about 15.8% of its value.
Market Intelligence Center  Nov 7  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with Quanta Services Inc. (PWR) that should provide a 3.94% return in just 105 days. Sell one Feb. '15 call at the $33.00 level for each 100...
Benzinga  Nov 6  Comment 
In a report published Thursday, D.A. Davidson analyst John B. Rogers reiterated a Buy rating and $40.00 price target on Quanta Services Inc (NYSE: PWR). In the report, D.A. Davidson noted, “GAAP EPS of $0.43 per share for the third quarter was...
Market Intelligence Center  Oct 24  Comment 
After closing Thursday at $32.47, Quanta Services Inc. (PWR) presents an attractive opportunity to get a 5.54% return in just 119 days, which is an annualized return of 17% (for comparison purposes only). To enter this trade, sell one Feb. '15...
Market Intelligence Center  Oct 10  Comment 
For a hedged play on Quanta Services Inc. (PWR), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the Feb. '15 $33.00 covered call for a net debit in the $31.23 area. That is also the break-even stock price for the...
Market Intelligence Center  Oct 9  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on Quanta Services Inc. (PWR) that includes 6.88% downside protection. Sell one contract of...




 

Quanta Services (PWR) installs and repairs infrastructure for the natural gas, electric, telecommunications, and cable industries. Its primary business is installing power lines and power distribution networks for companies that provide power, like gas and electric utilities.

The aging U.S. and Canadian power grid consisting of more than 200,000 miles of high-voltage lines now requires significant maintenance and expansion to handle the nation’s growing power needs. North American Electric Reliability Council (NERC) industry professionals currently recommend a complete electric infrastructural overhaul by 2014.[1] In addition, in conjunction with the 20% US Population growth since 1990, energy consumption has increased by a comparable 18%. [2] Increasing demand for electricity has resulted in increased spending on transmission and distribution systems. Quanta has been and continues to be a significant beneficiary of this global energy need.

Company Overview

Business Segments[3]

2007 Revenue By Segment
2007 Revenue By Segment[4][5]

Quanta Services operates in four segments: electric power, telecommunications, natural gas, and ancillary services.[6]

Business & Financial Metrics[12]

In 2009, PWR generated a net income of $162.2 million on $3.32 billion in total revenues. This represents a 2.9% increase in net income on a 12.2% decrease in revenues from 2008, when the company earned $157.6 million on revenues of $3.78 billion.

Trends and Forces

Aging U.S. and Canadian Infrastructure Will Need Renovation

The U.S. and Canadian electric power grid consists of more than 200,000 miles of high-voltage lines delivering electricity to over 300 million people.[13] The infrastructure is aging and requires significant maintenance and expansion to handle the nation's growing power needs. North American Electric Reliability Council (NERC) industry professionals estimate a complete electric infrastructural overhaul in the next 5-10 years in order to respond to the wavering reliability of the transmission system. In addition, NERC issued a report forecasting a 135,000 peak-megawatt consumption (ie consumption during summer) by 2017, a 17.7% increase over the next ten years. [14]. Lastly, the failure rate for an electricity transformer rises sharply 30 years after installation; the US' last major investment in transformers occurred in 1974, to accommodate a peak of 185 giga-voltage amperes. As a result, power companies throughout the United States are beginning to replace aging transformer units, which benefits PWR's Electric Works division.[15]5

Demand Spike In Energy as Result of 20% Domestic Population Growth

The U.S. population has increased by about 20% since 1990, with energy consumption increasing by a comparable 18%.[16]In addition, The EIA projects that U.S. electricity sales from producers to consumers will increase to 5168 billion kilowatt-hours in 2030.[17] Increasing demand for electricity has resulted in increased spending on transmission and distribution systems, as shown by increased investment spending by investor-owned utilities; as these utilities renovate their infrastructure to meet demand, specialized infrastructure companies such as Quanta reap the benefits.

Competition

Quanta Services competes with other specialized construction firms to acquire contracts from electric, telecommunications, and natural gas service providers. Some of its competitors include:

  • Emcor Group (EME) specializes in lighting systems, data communication systems, ventilation systems, fire protection systems, and water treatment systems.[18]
  • Integrated Electrical Services (IESC) is a U.S. provider of electrical contract services. IESC serves commercial, industrial, and residential markets.[19]
  • Mastec. Corp specializes in the installation and maintenance of communications and utility infrastructure in the United States.[20]
  • URS Corp., unlike Quanta, does most of its business through contracts with the U.S. federal government.[21]

References

  1. PWR 2007 10-K, Item 1: Business, page 4
  2. PWR 2007 10-K, Item 1: Business, page 4
  3. PWR 2009 10-K pg. 2  
  4. PWR 2007 10-K, Item 1: Business, page 3
  5. PWR Google Finance July 4, 2008
  6. PWR 2007 10-K, Item 1: Business, page 3
  7. PWR 2007 10-K, Item 1: Business, page 6
  8. PWR 2007 10-K, Item 1: Business, page 6
  9. PWR 2007 10-K, Item 1: Business, page 3
  10. PWR 2007 10-K, Item 1: Business, page 6
  11. PWR 2007 10-K, Item 1: Business, page 6
  12. PWR 2009 10-K pg. 31  
  13. PWR 2007 10-K, Item 1: Business, page 4
  14. PWR 2007 10-K, Item 1: Business, page 4
  15. SPX Annual Guidance Meeting 2008 pages 35-37, Source: Hartford Steam Boiler
  16. PWR 2007 10-K, Item 1: Business (Industry Overview), page 4
  17. PWR 2007 10-K, Item 1: Business (Industry Overview), page 4
  18. EME Google Finance, July 4,2008
  19. IESC Google Finance, July 4,2008
  20. MTZ Google Finance, July 4,2008
  21. URS Google Finance, July 4,2008
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