Fluor Corporation’s stock (NYSE: FLR) climbed nearly 12.5% in the last 5 trading days. This is not surprising considering how the stock tends to rebound following dips historically. We have previously argued that Fluor can offer short term gains, and our stance remains unchanged after this move. Although the potential gain now might be lower. Our AI engine predicts that even now, there exists nearly a 41% probability of Fluor moving up another 5% over the next 21 trading days. The chances of moving down -5% over the same time frame are meaningfully lower at 27%, suggesting much greater likelihood of upside. However, over the next 3 months, the chances of moving up or down by 10% are nearly the same. This indicates opportunity for small short term gains. Our detailed dashboard highlights the chances of Fluor’ stock rising or falling and should help you understand near-term return probabilities for different levels of movements. But looking at the underlying fundamentals, it appears that Fluor may not be the best stock out there for long-term investors. Our dashboard Big Movers: Fluor Moved 12.5% – What Next? lays this out.
Fluor’s stock price increased 12.5% last week. In comparison, the stock has decreased -61% between 2017 and 2019, and has decreased -77% between 2017 and now. It is clear that the market has not rewarded Fluor investors in the last few years. That’s a sign of concern. Why should now be anything different? We’ll be in a better position to answer that once we look at the underlying financial trends. It appears that Flour has struggled with growth in recent years. Its revenue has decreased -1.5% from $19,521 Mil in 2017 to $19,232 Mil in 2019, while margins stayed razor thin at under 1.5%. In the last 12 months, this figure dropped -6.48%. This year, the revenue could drop 10%-15% and we don’t really expect a sharp rebound next year either.
Taking both perspectives together, it appears that while traders may benefit from near-term momentum, investors should be cautious regarding a long-term investment decision. There are better alternatives. What if you’re looking for a more balanced portfolio instead? Here’s a high quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.