Jacobs Engineering (J) with a rare open market buy last week from director Chris Thompson of 10,000 shares at $140.22, a more than $1.4M buy. This is the first open market buy since 2018. Jacobs has traded higher by 30% in 2021 and up over 70% in the last year with shares just 2.5% below recent highs. The $18.25B company trades 20X earnings, 1.33X sales, and 13.5X cash. Jacobs provides consulting, technical, scientific, and project delivery services for the government and private sectors. The company is benefitting from a major spending push towards infrastructure modernization and $25B TAM opportunity in digital consulting. Their core markets around transportation, water, and environment services all should see significant spending by municipalities pick up over the next decade, too. Jacobs is a big beneficiary of the infrastructure push, as they noted last week at the Jefferies IT Services Summit:

“I think, certainly, there’s transportation that’s going to be roads and bridges, rail has been one of the items that’s had some robust dialogue on. 5G is in the mix. We are a material player in the 5G build-out of the infrastructure around the country. And certainly, some of the other areas with the administration currently having a very forward lean in terms of, what I will call, environmental ESG-related matters, clearly, with the strength and a leading position in environmental solutions that provide, not only in the nuclear space but in other developing contaminants like PFAS and other areas, we’re well positioned to go after these.”

Hedge fund ownership fell 8% in Q1. Analysts have an average target for shares of $139 with a Street High $170. Citi positive on 5/11 citing a solid backlog, ongoing Focus 2023 initiatives, and its relatively low leverage. Benchmark positive in May as the company has emerged as one of the largest ESG plays given its significant exposure to engineering and design of complex systems, which is prime territory for ESG improvements in water, clean energy, transportation, and climate resilience infrastructure.