Mid cap infrastructure construction stock Chicago Bridge & Iron Company N.V. (NYSE: CBI) fell 7.23% after being trashed in an article by an apparent short seller posted on Seeking Alpha, meaning its worth taking a closer look at the stock along with the performance of potential benchmarks like Jacobs Engineering Group Inc (NYSE: JEC), KBR, Inc (NYSE: KBR) and First Trust ISE Global Engineering and Construction Index Fund ETF (NYSEARCA: FLM).
What is the Chicago Bridge & Iron Company N.V.?Founded in 1889 in Chicago, mid cap Chicago Bridge & Iron Company N.V. calls itself the most complete energy infrastructure focused company in the world and a major provider of government services. In fact, Chicago Bridge & Iron Company N.V. is one of the most complete providers of a wide range of services including design, engineering, construction, fabrication, maintenance and environmental services.
As for potential performance benchmarks or peers, Jacobs Engineering Group Inc is one of the world's largest and most diverse providers of technical professional and construction services with around $12 billion in revenues last year; KBR, Inc is a global engineering, construction and services company supporting the energy, hydrocarbons, power, industrial, civil infrastructure, minerals, government services and commercial markets; and First Trust ISE Global Engineering and Construction Index Fund ETF tracks the ISE Global Engineering and Construction Index (which includes companies that are involved in the engineering, designing, planning, consulting, project managing and/or constructing of large civil and capital projects) through 61 holdings.
What You Need to Know or Be Warned About Chicago Bridge & Iron Company N.V.On Tuesday, an article appeared on Seeking Alpha from Prescience Point Research Group entitled: Chicago Bridge & Iron: Acquisition Accounting Shenanigans Dramatically Inflate Profitability - Prescience Point Initiates At Strong Sell. It's a rather lengthy piece filled with pretty charts, lots of numbers to digest and various innuendos while comments to the article are an interesting read as it sounds like the only "fraud" so far exposed by Prescience Point involved a Chinese small cap that, like many others, has since been delisted.
Nevertheless, Prescience Point alleges that after Chicago Bridge & Iron Company N.V. acquired the Shaw Group in 2013, it made retroactive adjustments to its purchase price allocation, enabling it to create a reserve of about $1.56B. The company then allegedly used the fund to significantly inflate its 2013 profits and gross profit margin to "mask" its "increasingly fragile financial condition." Prescience Point believes Chicago Bridge & Iron Company N.V. will be forced to take a goodwill write-down or restate its results, triggering a debt default and possibly leading to a liquidity crisis.
For its part, Chicago Bridge & Iron Company N.V. issued a brief statement pointing out that Prescience Point Research Group is a short seller, adding:
CB&I's second quarter financial results are scheduled to be released in late July 2014. The company is confirming today that it expects to report results within the ranges of its current guidance for the year.
With that said, consider who are Chicago Bridge & Iron Company N.V's major investors according to Yahoo! Finance data:
| Berkshire Hathaway, Inc | 9,550,755 | 8.88 | 832,348,298 | Mar 31, 2014 |
| Vanguard Group, Inc. (The) | 5,887,124 | 5.48 | 513,062,856 | Mar 31, 2014 |
| SouthernSun Asset Management, Inc. | 3,268,822 | 3.04 | 284,877,837 | Mar 31, 2014 |
| Balyasny Asset Management, LP | 2,950,241 | 2.74 | 257,113,503 | Mar 31, 2014 |
| Wellington Management Company, LLP | 2,869,385 | 2.67 | 250,066,902 | Mar 31, 2014 |
| BlackRock Institutional Trust Company, N.A. | 2,620,288 | 2.44 | 228,358,099 | Mar 31, 2014 |
| Calamos Advisors LLC | 2,341,596 | 2.18 | 204,070,091 | Mar 31, 2014 |
| Columbia Wanger Asset Management, L.P. | 2,155,000 | 2.00 | 187,808,250 | Mar 31, 2014 |
| Westpac Banking Corporation | 2,127,159 | 1.98 | 185,381,906 | Mar 31, 2014 |
| State Street Corporation | 1,769,503 | 1.65 | 154,212,186 | Mar 31, 2014 |
On the other hand, there has also been a awful lot of insider sales this year:
Insider Transactions Reported
| Jun 3, 2014 | STOCKTON WESTLEY S.Officer | 4,627 | Direct | Automatic Sale at $81.19 per share. | 375,666 |
| Jun 3, 2014 | STOCKTON WESTLEY S.Officer | 4,627 | Direct | Option Exercise at $8.19 - $47 per share. | N/A |
| Jun 2, 2014 | ASHERMAN PHILIP KOfficer | 17,757 | Direct | Option Exercise at $9.28 - $23.65 per share. | N/A |
| Jun 2, 2014 | ASHERMAN PHILIP KOfficer | 75,000 | Direct | Automatic Sale at $81.27 - $81.77 per share. | 6,114,0002 |
| May 13, 2014 | BALLSCHMIEDE RONALD AOfficer | 1,035 | Direct | Disposition (Non Open Market) at $0 per share. | N/A |
| May 12, 2014 | UNDERWOOD MICHAEL LDirector | 310 | Direct | Disposition (Non Open Market) at $0 per share. | N/A |
| May 9, 2014 | UNDERWOOD MICHAEL LDirector | 192 | Direct | Disposition (Non Open Market) at $78.85 per share. | 15,139 |
| May 9, 2014 | KISSEL W CRAIGDirector | 351 | Direct | Disposition (Non Open Market) at $78.85 per share. | 27,676 |
| May 9, 2014 | UNDERWOOD MICHAEL LDirector | 786 | Direct | Automatic Sale at $78.63 per share. | 61,803 |
| May 9, 2014 | BOLCH JAMES RDirector | 491 | Direct | Disposition (Non Open Market) at $78.85 per share. | 38,715 |
| May 9, 2014 | WILLIAMS MARSHA CDirector | 477 | Direct | Disposition (Non Open Market) at $78.85 per share. | 37,611 |
| May 9, 2014 | MCVAY LARRY DDirector | 452 | Direct | Disposition (Non Open Market) at $78.85 per share. | 35,640 |
| May 9, 2014 | FLURY L RICHARDDirector | 468 | Direct | Disposition (Non Open Market) at $78.85 per share. | 36,901 |
| May 1, 2014 | MCVAY LARRY DDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | MILLER JAMES HDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | UNDERWOOD MICHAEL LDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | WILLIAMS MARSHA CDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | FRETZ DEBORAH MDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | BOLCH JAMES RDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | KISSEL W CRAIGDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| May 1, 2014 | FLURY L RICHARDDirector | 2,175 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Apr 30, 2014 | MILLER JAMES HDirector | N/A | Direct | Statement of Ownership | N/A |
| Apr 10, 2014 | BAILEY BETH AOfficer | 5,000 | Direct | Automatic Sale at $85.55 per share. | 427,750 |
| Apr 4, 2014 | MULLEN PATRICK KOfficer | 2,637 | Direct | Automatic Sale at $89 per share. | 234,693 |
| Apr 1, 2014 | KISSEL W CRAIGDirector | 24 | Direct | Acquisition (Non Open Market) at $74.14 per share. | 1,779 |
| Mar 27, 2014 | WILLIAMS MARSHA CDirector | 6,500 | Direct | Automatic Sale at $82.99 per share. | 539,435 |
| Mar 26, 2014 | CHANDLER RICHARD E JROfficer | 20,801 | Direct | Automatic Sale at $84.60 - $85.52 per share. | 1,769,0002 |
| Mar 26, 2014 | RAY EDGAR C.Officer | 102,068 | Direct | Automatic Sale at $84.10 - $85.37 per share. | 8,649,0002 |
| Mar 26, 2014 | RAY EDGAR C.Officer | 41,607 | Direct | Option Exercise at $8.19 - $47 per share. | N/A |
| Mar 26, 2014 | FLURY L RICHARDDirector | 12,410 | Direct | Automatic Sale at $84.95 - $85.5 per share. | 1,058,0002 |
| Mar 25, 2014 | MCCARTHY DANIEL M.Officer | 26,029 | Direct | Automatic Sale at $85.92 per share. | 2,236,411 |
| Mar 18, 2014 | STOCKTON WESTLEY S.Officer | 2,054 | Direct | Automatic Sale at $85 per share. | 174,590 |
| Mar 18, 2014 | MULLEN PATRICK KOfficer | 5,000 | Direct | Automatic Sale at $86 per share. | 430,000 |
| Mar 11, 2014 | STOCKTON WESTLEY S.Officer | 2,095 | Direct | Automatic Sale at $83.62 per share. | 175,183 |
| Mar 7, 2014 | SCORSONE LUKE V.Officer | 17,472 | Direct | Option Exercise at $8.19 - $47 per share. | N/A |
| Mar 7, 2014 | SCORSONE LUKE V.Officer | 34,977 | Direct | Automatic Sale at $84.40 - $85.28 per share. | 2,967,0002 |
| Mar 6, 2014 | MULLEN PATRICK KOfficer | 365 | Direct | Disposition (Non Open Market) at $0 per share. | N/A |
| Mar 3, 2014 | ASHERMAN PHILIP KOfficer | 75,000 | Direct | Automatic Sale at $82.70 - $83.16 per share. | 6,220,0002 |
| Mar 1, 2014 | CHANDLER RICHARD E JROfficer | 1,817 | Direct | Disposition (Non Open Market) at $84.19 per share. | 152,973 |
| Feb 24, 2014 | BALLSCHMIEDE RONALD AOfficer | 18,471 | Direct | Automatic Sale at $80.34 - $81.05 per share. | 1,491,0002 |
| Feb 21, 2014 | SCORSONE LUKE V.Officer | 997 | Direct | Disposition (Non Open Market) at $79.17 per share. | 78,932 |
| Feb 21, 2014 | RAY EDGAR C.Officer | 985 | Direct | Disposition (Non Open Market) at $79.17 per share. | 77,982 |
| Feb 21, 2014 | CHANDLER RICHARD E JROfficer | 1,057 | Direct | Disposition (Non Open Market) at $79.17 per share. | 83,682 |
| Feb 21, 2014 | BALLSCHMIEDE RONALD AOfficer | 1,468 | Direct | Disposition (Non Open Market) at $79.17 per share. | 116,221 |
| Feb 21, 2014 | BAILEY BETH AOfficer | 1,016 | Direct | Disposition (Non Open Market) at $79.17 per share. | 80,436 |
| Feb 21, 2014 | ASHERMAN PHILIP KOfficer | 4,650 | Direct | Disposition (Non Open Market) at $79.17 per share. | 368,140 |
| Feb 21, 2014 | MCCARTHY DANIEL M.Officer | 1,139 | Direct | Disposition (Non Open Market) at $79.17 per share. | 90,174 |
| Feb 21, 2014 | STOCKTON WESTLEY S.Officer | 438 | Direct | Disposition (Non Open Market) at $79.17 per share. | 34,676 |
| Feb 21, 2014 | MULLEN PATRICK KOfficer | 862 | Direct | Disposition (Non Open Market) at $79.17 per share. | 68,244 |
| Feb 20, 2014 | SABIN JAMES W.Officer | 1,190 | Direct | Statement of Ownership | N/A |
| Feb 20, 2014 | STOCKTON WESTLEY S.Officer | 2,940 | Direct | Automatic Sale at $79.86 - $80.06 per share. | 235,0002 |
| Feb 20, 2014 | RAY EDGAR C.Officer | 8,960 | Direct | Disposition (Non Open Market) at $79.86 per share. | 715,545 |
| Feb 20, 2014 | STOCKTON WESTLEY S.Officer | 1,768 | Direct | Disposition (Non Open Market) at $79.86 per share. | 141,192 |
| Feb 20, 2014 | STOCKTON WESTLEY S.Officer | 9,426 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | MCCARTHY DANIEL M.Officer | 12,134 | Direct | Disposition (Non Open Market) at $79.86 per share. | 969,021 |
| Feb 20, 2014 | RAY EDGAR C.Officer | 27,985 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | MCCARTHY DANIEL M.Officer | 38,153 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | CHANDLER RICHARD E JROfficer | 8,547 | Direct | Disposition (Non Open Market) at $79.86 per share. | 682,563 |
| Feb 20, 2014 | SCORSONE LUKE V.Officer | 8,748 | Direct | Disposition (Non Open Market) at $79.86 per share. | 698,615 |
| Feb 20, 2014 | SCORSONE LUKE V.Officer | 28,163 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | ASHERMAN PHILIP KOfficer | 232,375 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | ASHERMAN PHILIP KOfficer | 72,064 | Direct | Disposition (Non Open Market) at $79.86 per share. | 5,755,031 |
| Feb 20, 2014 | BALLSCHMIEDE RONALD AOfficer | 15,457 | Direct | Disposition (Non Open Market) at $79.86 per share. | 1,234,396 |
| Feb 20, 2014 | BALLSCHMIEDE RONALD AOfficer | 47,905 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | BAILEY BETH AOfficer | 9,289 | Direct | Disposition (Non Open Market) at $79.86 per share. | 741,819 |
| Feb 20, 2014 | SABIN JAMES W.Officer | 5,266 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | MULLEN PATRICK KOfficer | 21,364 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | BAILEY BETH AOfficer | 28,478 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 20, 2014 | CHANDLER RICHARD E JROfficer | 30,980 | Direct | Acquisition (Non Open Market) at $0 per share. | N/A |
| Feb 19, 2014 | STOCKTON WESTLEY S.Officer | 321 | Direct | Disposition (Non Open Market) at $79.96 per share. | 25,667 |
| Feb 19, 2014 | BALLSCHMIEDE RONALD AOfficer | 1,648 | Direct | Disposition (Non Open Market) at $79.96 per share. | 131,774 |
| Feb 19, 2014 | SCORSONE LUKE V.Officer | 964 | Direct | Disposition (Non Open Market) at $79.96 per share. | 77,081 |
| Feb 19, 2014 | RAY EDGAR C.Officer | 868 | Direct | Disposition (Non Open Market) at $79.96 per share. | 69,405 |
| Feb 19, 2014 | MULLEN PATRICK KOfficer | 407 | Direct | Disposition (Non Open Market) at $79.96 per share. | 32,543 |
| Feb 19, 2014 | BAILEY BETH AOfficer | 914 | Direct | Disposition (Non Open Market) at $79.96 per share. | 73,083 |
| Feb 19, 2014 | ASHERMAN PHILIP KOfficer | 7,984 | Direct | Disposition (Non Open Market) at $79.96 per share. | 638,400 |
| Feb 19, 2014 | MCCARTHY DANIEL M.Officer | 890 | Direct | Disposition (Non Open Market) at $79.96 per share. | 71,164 |
| Feb 17, 2014 | RAY EDGAR C.Officer | 648 | Direct | Disposition (Non Open Market) at $79.42 per share. | 51,464 |
| Feb 17, 2014 | BALLSCHMIEDE RONALD AOfficer | 1,043 | Direct | Disposition (Non Open Market) at $79.42 per share. | 82,835 |
| Feb 17, 2014 | ASHERMAN PHILIP KOfficer | 4,302 | Direct | Disposition (Non Open Market) at $79.42 per share. | 341,664 |
| Feb 17, 2014 | BAILEY BETH AOfficer | 647 | Direct | Disposition (Non Open Market) at $79.42 per share. | 51,384 |
| Feb 17, 2014 | STOCKTON WESTLEY S.Officer | 205 | Direct | Disposition (Non Open Market) at $79.42 per share. | 16,281 |
| Feb 17, 2014 | MULLEN PATRICK KOfficer | 244 | Direct | Disposition (Non Open Market) at $79.42 per share. | 19,378 |
| Feb 17, 2014 | SCORSONE LUKE V.Officer | 706 | Direct | Disposition (Non Open Market) at $79.42 per share. | 56,070 |
| Feb 17, 2014 | MCCARTHY DANIEL M.Officer | 672 | Direct | Disposition (Non Open Market) at $79.42 per share. | 53,370 |
| Feb 16, 2014 | RAY EDGAR C.Officer | 529 | Direct | Disposition (Non Open Market) at $79.42 per share. | 42,013 |
| Feb 16, 2014 | BALLSCHMIEDE RONALD AOfficer | 809 | Direct | Disposition (Non Open Market) at $79.42 per share. | 64,250 |
| Feb 16, 2014 | SCORSONE LUKE V.Officer | 670 | Direct | Disposition (Non Open Market) at $79.42 per share. | 53,211 |
| Feb 16, 2014 | MULLEN PATRICK KOfficer | 211 | Direct | Disposition (Non Open Market) at $79.42 per share. | 16,757 |
| Feb 16, 2014 | STOCKTON WESTLEY S.Officer | 194 | Direct | Disposition (Non Open Market) at $79.42 per share. | 15,407 |
| Feb 16, 2014 | MCCARTHY DANIEL M.Officer | 830 | Direct | Disposition (Non Open Market) at $79.42 per share. | 65,918 |
| Feb 16, 2014 | ASHERMAN PHILIP KOfficer | 2,257 | Direct | Disposition (Non Open Market) at $79.42 per share. | 179,250 |
| Feb 16, 2014 | BAILEY BETH AOfficer | 589 | Direct | Disposition (Non Open Market) at $79.42 per share. | 46,778 |
| Feb 10, 2014 | RAY EDGAR C.Officer | 472 | Direct | Option Exercise at $14.12 per share. | 6,664 |
| Jan 2, 2014 | BALLSCHMIEDE RONALD AOfficer | 1,999 | Direct | Automatic Sale at $82.21 - $82.22 per share. | 164,0002 |
| Jan 2, 2014 | KISSEL W CRAIGDirector | 25 | Direct | Acquisition (Non Open Market) at $69.33 per share. | 1,733 |
Share Performance: Chicago Bridge & Iron Company N.V. vs. JEC, KBR & FLM
On Tuesday, mid cap Chicago Bridge & Iron Company N.V. fell 7.23% to $68.26 (CBI has a 52 week trading range of $56.04 to $89.22 a share) for a market cap of $7.38 billion plus the stock is down 16.5% since the start of the year, up 15.7% over the past year and up 402.6% over the past five years. Here is a look at the long term performance of Chicago Bridge & Iron Company N.V. verses Jacobs Engineering Group Inc , KBR, Inc and First Trust ISE Global Engineering and Construction Index Fund ETF:
As you can see from the above chart, Chicago Bridge & Iron Company N.V. has been a clear outperformer.
Finally, here are the latest technical charts for Chicago Bridge & Iron Company N.V., Jacobs Engineering Group Inc, KBR, Inc and First Trust ISE Global Engineering and Construction Index Fund ETF:
The Bottom Line. Chicago Bridge & Iron Company N.V. will be interesting to watch for the rest of this week and into next week to see if the accusations actually stick. If not, chalk this up as another failed attempt by the shorts to profit from trashing a stock.
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