4. MasTec Inc. (NYSE:MTZ)
Market Cap as of October 22: $9.97 billion
Number of Hedge Fund Holders: 47
MasTec Inc. (NYSE:MTZ) is a multinational infrastructure engineering and construction company that provides engineering, building, installation, maintenance, and upgrade of energy, utility, and communications infrastructure. It operates through a network of subsidiaries and joint ventures, serving a diverse customer base in both the public and private sectors.
In Q2, the company secured a major 700-mile, high-voltage transmission and substation project, valued between $300 million and $500 million annually. This project represents a significant milestone in the strategy to pursue large transmission projects. While the transmission project development cycle remains challenging, management is optimistic about recent bipartisan legislation in Washington.
Growth remained on track in the second quarter of 2024, driven by progress in both the wireless and wireline markets. The Nokia Ericsson swap out with AT&T progressed as planned, and the company is experiencing robust growth in its wireline business. Revenue growth for Q2 was 3.03%, recording $2.96 billion in total revenues, with an earnings per share value of $0.96. H2 2024 revenues are expected to increase organically by ~20% compared to the previous year.
The recent transmission project win is a significant milestone for the company, positioning its Power Delivery segment for long-term success. The Clean Energy & Infrastructure segment will also benefit from increased investments in power generation. Combined with the growing demand in telecom and the stability of the Oil and Gas pipeline segment, MasTec Inc. (NYSE:MTZ) is well-positioned for the future.
As a leading construction firm with a broad geographic reach and strong financial stability, MasTec Inc. (NYSE:MTZ) is well-positioned to capitalize on the burgeoning AI data center market and the increasing demand for high-speed wireless connectivity. With its strategic focus on expanding its presence in the energy sector, the company is poised to benefit from long-term growth opportunities in this market.
FPA Queens Road Small Cap Value Fund stated the following regarding MasTec, Inc. (NYSE:MTZ) in its Q2 2024 investor letter:
“MasTec, Inc. (NYSE:MTZ) is a contractor that builds and repairs infrastructure for telecoms, electric utilities, oil and gas pipelines, and the clean energy industry. The company benefits from strong spending for 5G in telecom and government support (including the Infrastructure Investment and Jobs Act) for clean energy and the electrical grid. The Mas brothers have an impressive history of rolling up smaller players and growing earnings, most recently in the electrical and clean energy spaces. However, we became uncomfortable with the low margins and competition in the electrical utility and clean energy businesses. On Aug 4, 2023, in its Q2 2023 earnings release, the company reduced guidance, and we began to exit our position, partially in Q3 2023 and fully by the end of Q4 2023.”
