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Babcock & Wilcox Co (BWC): Who’s Getting a Lift as Power Plants Clean Boilers?

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insider trading bwcBabcock & Wilcox Co (NYSE:BWC) appears on a roll these days. Less than a month after this advanced engineering, manufacturing and construction company hit a 52-week high of $30.23 on May 28, it soared to a new peak of $30.84 on June 18.

The question now is if tailwinds are still strong enough to power Babcock & Wilcox Co (NYSE:BWC)’s sail. Indications are that a further uptick in B&W can’t be discounted. Demand for this Charlotte, NC-based company’s competency in clean energy technology seems headed toward even more robust levels.

Building Obama’s legacy

In the coming weeks, the White House is expected to announce major policy initiatives on carbon emissions for existing power plants, according to a New York Timesreport. Since his reelection, President Barack Obama has been assertive on climate policy and has indicated that a new set of U.S. greenhouse gas standards to help slow global warming shall be a legacy of his administration.

There’s a sense of urgency here. Experts say setting standards such as these has to begin before year-end because it can take years before rules as complex as these can be completely implemented. Also, the imposition of carbon standards on existing utilities would also be costlier as compared to newly-built plants.

A foundation in conversion technology

One of Babcock & Wilcox Co (NYSE:BWC)’s segments, power generation, has an inside track on the demand for clean energy solutions that would be spurred by the expected White House initiatives. This segment is a worldwide supplier of environmental equipment and components and related services. Notably, one of the technologies tat the company’s power generation group provides is  conversions to cleaner-burning natural gas of coal-fired boilers that are among the prime targets for carbon emission control.

URS Corp (NYSE:URS), based in San Francisco, CA, is another engineering, construction and technical services company with specialization in clean-air technologies. Among its major projects was the clean-air modification to cut emissions at the fossil plant of the Tennessee Valley Authority (NYSE:TVE) in Bull Run Creek near Oak Ridge, TN.

Significantly, the Southern utility TVA is among the power companies which will likely bear the brunt of spending on the new greenhouse standards being mulled in Washington. Established in 1933 by President Roosevelt, this utility has a number of older coal-burning plants which require upgrades. Already indebted to the tune of $25 billion, the TVA has sought an increase in its capital, but the Obama administration instead seeks its privatization.

Mixed first quarter omens

Results for the 2013 first quarter for URS and Babcock & Wilcox Co (NYSE:BWC), both with market caps of about $3.5 billion, were mixed.

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