“Give me a lever long enough,” said Archimedes, “and a place to stand, and I will move the world.”

If the old Greek were alive today, he might well work for Fluor (NYSE: FLR, $41.95), one of the world’s largest public engineering and construction companies.  Fluor designs and builds many of the world’s most complex and challenging construction projects.

The company does indeed move the world, working with governments and multinational corporations in 25 countries on six continents on such projects as a massive refinery for Taneco in Russia, the $1.4 billion East Span of San Francisco’s Bay Bridge and the new U.S. Embassy in United Arab Emirates.  Its 2008 revenues totaled $22.3 billion, a figure the company is likely to match as it closes out 2009.

Today, the nearly 100-year-old company stands poised to benefit from massive worldwide investment in energy and infrastructure.

Fluor divides its results into five operating segments:  Oil and gas, industry and infrastructure, power, government and global services.  A global reach adds to this business diversity: Fluor generates about half of revenue overseas. Sixty percent of its order backlog is outside of the United States, with much of this business in China and other fast-growing markets.

Two factors could spell big profits for Fluor’s investors.  

The first is that Fluor is a “cyclical” company, one whose valuation rises and falls with the overall economic cycle. The company is still hampered by Wall Street’s fear that no one wants to launch massive construction projects in a recession and that Fluor will see weak demand.  That trepidation is a huge drag on shares, which are now selling at just 10.6 times earnings — a massive -55.1% discount to their five-year average of 23.6 times earnings.  

The catalyst that will propel these beaten-down shares back to their typical valuation is a renewed worldwide demand for its services.  (See how catalysts are generating winning stocks nearly 9 out of 10 times) Here’s a look at how that will affect each of the company’s business units:

Power
Electric utilities throughout the United States are ready to embrace “clean” energy strategies.   What’s stopping them from going through with it? Washington has yet to provide legislative clarity. Utilities are loathe to invest the millions and billions that new plants and equipment require before they know what the playing field will be look like.

Some direction in that regard should be coming soon as world leaders convene in Copenhagen for the global climate summit, after which Congress is scheduled to take up environmental legislation.  Fluor says that once the legislation is clear, one way or another, the utility market should take off.  As one of the preeminent providers of energy engineering and construction firm — especially for extremely large projects — Fluor could make out big time.

One opportunity: Nuclear power. With more than six decades of experience in the field, Fluor will be in a tremendous position to benefit from the nuclear renaissance likely to unfold in the next few years, both in this country and in others.  Fluor has already been awarded contracts to build two nuclear reactors in South Texas in the next few years.  

Higher Prices Mean More Offshore Oil Exploration
Higher oil prices provide a financial incentive for producers to embrace expensive offshore exploration. As worldwide demand for an increasingly scarce oil grows, and as new technology opens previously inaccessible fields, drilling projects across the globe are set to boom.

Fluor has had a ten-year relationship with China Offshore Engineering Corp. and recently entered into a formal alliance with the leading Chinese firm to pursue offshore oil and gas projects in the high-growth Asia-Pacific region.  In addition, Fluor signed another agreement in August with offshore construction firm Global Industries (Nasdaq: GLBL) to pursue offshore projects in the Middle East and North Africa.

Massive Government Spending
Given its long ties to and strong presence in China, Fluor stands to benefit from the country’s planned infrastructure build-out.  The Chinese government said last month that it plans to spend an astonishing $454 billion on environmental protection by 2015.

Fluor has also won a contract from the U.S. Defense Department to provide infrastructure support for the troops in Afghanistan. The contracts could be worth as much as $7.5 billion to Fluor in the next several years, according to a recent report in The Wall Street Journal.

One thing that contributes to Fluor’s ability to exploit these opportunities is its incredibly strong balance sheet.  Its most recent filings show microscopic debt, obligations roughly equal to 4.4% of its $3.1 billion in shareholder equity. The company also has $2.4 billion in cash.

Even though Fluor has managed to increase its earnings +4.4% this year, the company has underperformed the market. Shares are down -4.6% for the year, a terrible performance given the S&P 500’s +22.8% year-to-date advance.  Yet such underperformance is an aberration. Fluor has averaged a +11.5% total return during the past five years, far and away superior to the S&P, which has averaged a -1.4% loss in the same period.

Fluor appears to be on the cusp of an earnings bonanza but is still selling at historically low levels. The prospects for these shares are bright.