FLR Lost 25% In A Month. Do You Buy Or Wait?
Fluor (FLR) stock is down 25.3% in 21 trading days. The stock looks fairly priced at the moment, though history suggests you may benefit from buying dips – but the benefit is likely to be small. Consider the following data:
- Size: A $6.9 Bil company with $16 Bil in revenue currently trading at $41.55.
- Fundamentals: Last 12 month revenue growth of 3.6% and operating margin of 1.9%.
- Liquidity: Has Debt to Equity ratio of 0.2 and Cash to Assets ratio of 0.2
- Valuation: Currently trading at P/E multiple of 1.7 and P/EBIT multiple of 15.2
- Has returned (median) 10.7% within a year following sharp dips since 2010. See FLR Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for FLR, see Buy or Sell FLR Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and FLR drops another 20-30% to $29.08 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Fluor (FLR) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: FLR provides global EPC services across energy transition, urban development, government technical solutions, and other sectors, focusing on decarbonization, renewable fuels, carbon capture, and low-carbon energy sources.
2022 Inflation Shock
- FLR stock fell 40.8% from a high of $24.68 on 7 May 2021 to $14.60 on 21 September 2021 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 31 December 2021
- Since then, the stock increased to a high of $58.93 on 7 November 2024 , and currently trades at $41.55
| FLR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -40.8% | -25.4% |
| Time to Full Recovery | 101 days | 464 days |
2020 Covid Pandemic
- FLR stock fell 83.6% from a high of $20.79 on 16 January 2020 to $3.40 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 19 January 2021
| FLR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -83.6% | -33.9% |
| Time to Full Recovery | 307 days | 148 days |
2018 Correction
- FLR stock fell 73.8% from a high of $61.48 on 23 April 2018 to $16.11 on 31 October 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| FLR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -73.8% | -19.8% |
| Time to Full Recovery | Not Fully Recovered days | 120 days |
2008 Global Financial Crisis
- FLR stock fell 70.0% from a high of $98.64 on 23 June 2008 to $29.56 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| FLR | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -70.0% | -56.8% |
| Time to Full Recovery | Not Fully Recovered days | 1480 days |
Worried that FLR could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.