Posted by kcchongnz > 2014-04-03 12:38 | Report Abuse

When evaluating construction companies, the order book may not be the most important criterion in deciding which construction company to invest in. On the contrary, i strongly believe it is the efficiency of the company; what are its margins, ROE and ROIC which are most important. These metrics determine if the bottom line will be good. As long as there are reasonable job order book (need not necessary the big magnitude of it), a highly efficient construction company will do very well.

Next consider which company sells cheaply with the metrics such as PE ratio. In actual fact as companies have different capital structure, excess cash etc, the enterprise value divided by ebit is a far superior metric.

Please refer to the following link for a comparison of some construction companies.

http://klse.i3investor.com/blogs/kcchongnz/46573.jsp