COMPANY DESCRIPTION

Quanta Services is a provider of contracting services, providing infrastructure solutions. The services Co. provides include the design, installation, upgrade, repair and maintenance of infrastructure within industries such as electric power transmission and distribution networks, substation facilities, renewable energy facilities, pipeline transmission and distribution systems and facilities, and infrastructure services for the offshore and inland water energy markets. Co. also owns fiber optic telecommunications infrastructure and licenses the right to use these point-to-point fiber optic telecommunications facilities. Co.'s fiber optic service providings include lit network services.

 

ECONOMIC MOAT

In our opinion, Quanta Services has no economic moat.  PWR relies on superior execution for success.

 

OUTLOOK

Quanta Services ended 2014 on a good note and earnings should continue to climb in 2015. Quanta bought three companies in the first two months of 2015, including an underground utility distribution contractor, a supplier and material procurement specialist for the power and utility industry, and a company that specializes in the engineering, procurement, construction, and commissioning of compression and surface facilities. The overall outlook for Quanta's businesses is very positive, given the firm's position in key growth markets and high backlog. There are always challenges when it comes to engineering & construction services, but we think management does well to balance these challenges while executing on opportunities in the marketplace. All in all, we think PWR is a solid near- and long-term stock.

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STRENGTHS

  • Strong market position

  • Diversification into non-notebook markets Global footprint 

WEAKNESSES

  • Decline in financial performance 

THREATS

  • Negative trends in the notebook segment

  • Intense competition 

OPPORTUNITIES

  • Quanta will benefit from the robust cloud spending

  • Custom server business

  • Strong growth in the tablet shipments 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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