US Edition Balfour Beatty
270.1p +6.2
Questor says BUY
Actually, Questor suspects that this will turn out to a shrewd move – just like the stake he took in Goldman Sachs in September last year.
Another company that sees solid prospects for the US economy is Balfour Beatty. Earlier this year, Ian Tyler, Balfour's chief executive, told Questor that he planned to expand the US business, bringing the revenue contribution up from 30pc to 40pc. Then, in September, the company unveiled a transformation deal in the US, buying Parsons Brinckerhoff, an employee-owned company, for $626m (£377m).
Parsons provides strategic consulting, planning, engineering, and programme and construction management services to both public and private sector clients. The company is involved in major infrastructure projects in the transport, power, water and environmental sectors. After the addition of this company, the group order book now stands at £13.7bn.
The rest of the group's third-quarter update was bullish. The company said there had been a "strong overall performance" in the US and UK building sectors. The group has an enviable balance sheet with an average daily net cash position in the quarter of £260m.
The shares are yielding a safe 4.5pc and the earnings multiple, at 7.5 times, is not demanding.
Questor advised shareholders to take up their rights in September when the Parsons acquisition was unveiled. The group offered three shares for seven at 180p each. Questor first recommended buying Balfour shares at 350¼p in January, so the theoretical ex-rights price of this recommendation is 299.175p. The shares are currently 10pc below this adjusted tip price, but the stance on the shares remains buy.