Shaw Group (SGR): Shaw Group has a $4.08 billion dollar market cap, with a stated backlog of about $16.5 billion. Shaw Group’s backlog is broken down into 5 main business segments: Fossil & Nuclear, Maintenance, Energy & Chemicals, Fabrication & Manufacturing and Environmental & Infrastructure. Shaw’s Fossil & Nuclear division backlog is worth about $6.7 billion alone, with about $1 billion in new orders coming in the 2nd quarter 2008. This part of Shaw’s business is an industry leader in the gas, coal and nuclear powered facilities space, recently executing 6 new coal-fired projects in England. For the 3rd quarter 2008, Shaw’s fossil & nuclear business has been already awarded $498 million dollars worth of sales. EBITDA margins for this portion of the business are at $48.3 million vs Q3 2007of $27.9 million. If McCain starts to pick up steam, this could be huge. Shaw Groups Maintenance business currently has a backlog of $1.5 billion, with about $200 million in new orders coming in the 2nd quarter 2008 as well. This part of the backlog focuses mostly on expanding the life and capacity of older fossil and nuclear planets. For the 3rd quarter 2008, the maintenance portion of the business was recent awarded $215 million dollars worth of sales. EBITDA margins for this portion of the business are at $14.9 million vs Q3 2007of $14.6 million The energy and chemicals portion of the business currently has a backlog of $2.3 billion, mostly based around various refinery expansion projects. Currently Asia and the Middle East are expected to increase processing of the world’s petrochemicals from about 25% to over 55% in the coming decade due to various economics of sale. Shaw is poised to capture this market segment. For the 3rd quarter 2008, Shaw’s energy and chemical business was awarded $424 million in new contracts coming from Hyundai Engineering and various Middle East nations EBITDA margins for this portion of the business are at $33.7 million vs Q3 2007 of $16.4 million Fabrication and Manufacturing represent the smallest portion of the total backlog, representing about $700 million in sales. Here Shaw is the leading provider of piping solutions for power plants, and was recently awarded a $112 million dollar contract for a multi-national Midwest US client.. EBITDA margins here for this portion of the business are slipping at $24.8 million vs. last quarter’s margins of $32.8 million and Q2 2007 margins of $25.0 million. Here the likely culprit is the rising price of steel used in their piping solutions. Environmental and Infrastructure represents about $5.2 billion (the highest in the company’s history) worth of business. Here Federal spending remains steady with continued focus on terrorism and military transformation. For the 3rd quarter, Shaw won a whopping $2.7 billion dollars worth of contracts, with $2 billion coming from a final construction contract modification for the Department of Energy’s MOX fuel fabrication facility. In 1999, the National Nuclear Security Administration signed a contract with Shaw AREVA MOX services (a sub-company within Shaw Group) to design, build and operate a Mixed Oxide (MOX) Fuel Fabrication Facility. This facility will be a major component in the United States program to dispose of surplus weapon-grade plutonium. Construction of the 600,000 square foot facility requires over 170,000 cubic yards of concrete, 35,000 tones of reinforcing steel, 23000 instruments, 1,000 tons of heating and air condition vents, 500,000 feet of conduit, 47,000 feet of cable tray, 3,000,000 feet of power and control cable and 80 miles of piping When its all said and done, the MOX fuel fabrication facility will be capable of turning 3.5 metric tons of weapon-grade plutonium into MOX fuel assemblies annual. Back to Shaw Groups backlog, Shaw expects that over the next 12-months 40% or $6.5 billion dollars of their backlog will be converted into actually sales, another 25% or $4.1 billion over the next 13-24 months and finally 35% greater than 24 months. Near its 52-week low, Shaw is a steal at these levels.

$7BB market cap---with a $8BB backlog

No Analysis added

Another stock trading well below its book value is KBR. KBR currently has a market cap of $4.03 billion, with a backlog of $13.4 billion. 89% of KBR’s revenue is international based with 11% domestic. KBR’s backlog is broken up into 6 pieces: Downstream, Government & Infrastructure, Services, Technology, Upstream and Ventures The downstream unit has a backlog of just under $300 million, mostly focused on various downstream projects, such as refining. Most of this segment is based on emerging markets. Government & Infrastructure has a backlog of $5 billion dollars, with vast diversification among various defense services and non-defense branches of the United States government The services business unit backlog ballooned from Q12007 to Q12008, up a whopping 208%. Mostly driven from demand from the Canadian oil sands, this is an indirect play on the Canadian oil sands. Other notable projects include, Texas Instruments Campuses project, Air Products Hydrogen facility and MMM Vessel business. Technology is the smallest backlog of the portfolio, coming in around $110 million dollars. This is mostly leveraged to intellectual property assets and is focused on capitalizing on future licensing opportunities. The Upstream side of the business accounts for the largest portion of the backlog portfolio, coming in at a $6.5 billion dollars, vs. $4 billion Q107. This portion is directly leveraged to the price of oil and natural gas and exploration thereof. The Ventures backlog accounts for $700 million dollars, up 17% since Q107. Here KBR makes equity investments on a stand-alone basis. Near its 52-week low, KBR’s total backlog has grown from $10.7 billion in Q107 to $13.4 billion Q108,u up 25% Year-over-Year. During the same time, recurring business income has grown 30%, which means KBR’s customers love their service. KBR has ZERO debt and $1.5 billion in cash sitting on the books, which is shocking, given how capital intensive the engineering business is by nature. KBR is another insanely cheap stock.