Hyperloop is closer to Reality, is AECOM Making Money?

Virgin Hyperloop One has unveiled the first prototype for a Hyperloop passenger pod in Dubai.

The interior of the pods looks like the first-class section of a high-speed trainer, photographs published by Dezeen indicate. The design features sleek white surfaces and comfortable looking reclining chairs that swivel around. The interior is the work of Dutch designer Daan Roosegaarde.

The pods unveiled in Dubai are 28.543-feet (8.7 meters) long about the same length and size as a railroad passenger car or a small bus. The inside of the pods is about 3.3 meters (10.83 feet) in diameter which provides people a lot of room around.

It is not clear when the pods will be used because Hyperloop One has not yet tested its technology with human beings in it. The unicorn; part of Sir Richard Branson’s Virgin Group, has been testing its XP-1 Hyperloop pod at its track in North Las Vegas, Nevada.

Hyperloop One is involved in plans in the United Arab Emirates (UAE) that call for an 87-mile (140 kilometers) Hyperloop track between Dubai and Abu Dhabi. The track would be the first working route Hyperloop route in the world if it is ever built.

Hyperloop in Columbus to Chicago Study

Hyperloop One has made some progress elsewhere. Its technology was included in a $2.5 million environmental impact study for a high-speed rail route between Chicago, Illinois, and Columbus, Ohio, a press release indicates. The study involves the Indiana Department of Transportation, the Ohio Department of Transportation, and the cities of Columbus, Fort Wayne, Indiana, and Lima, Ohio.

Interestingly, enough the state of Illinois and the city of Chicago are not involved in the study. Nor is the city of Gary, Indiana, through which such a Hyperloop would presumably pass.

The study is being conducted by the Mid-Ohio Regional Planning Commission. A Columbus to Chicago route was one of the winners of Hyperloop One’s global challenge for potential routes last year. That route would run from Pittsburgh, Pennsylvania, to Chicago, via Columbus; Ohio’s state capitol.

The study is basically bureaucratic paperwork but it is a start. It demonstrates that Hyperloop is a serious technology that might become a widely used solution. That will undoubtedly interest investors in engineering companies like AECOM (NYSE: ACM).

AECOM a Hyperloop Investment you can make now

AECOM (NYSE: ACM) is the engineering, architecture, and construction management company that worked on the Hyperloop One track in North Las Vegas. It has also been associated with some Hyperloop proposals including one in Colorado.

Investors will be interested because AECOM is an existing publicly traded that makes money which you can invest in right now. AECOM has worked on a wide variety of infrastructure projects around the world including the massive Crossrail scheme in London, and the 1,200-kilometer long Etihad Rail line in the UAE. Etihad Rail is envisioned as a freight and passenger railway network that will connect the UAE, the Kingdom of Saudi Arabia, Kuwait, Qatar, and Bahrain.

AECOM is involved with some interesting projects and it might in on the ground floor of a huge new transportation technology (Hyperloop). Yet investors will ask if AECOM is making money. The answer is yes.

AECOM is Making Money

The great thing about AECOM from a value investment standpoint is that it is making from unsexy basic technology schemes like rail. More importantly, AECOM is pretty cheap right now – it was trading at $36.01 a share on 5 March 2018.

The highlights of AECOM’s financial numbers, those reported on 31 December 2017 include:

  • Growing quarterly revenues of $4.9108 billion; those revenues increased by 12.68% during 4th Quarter 2017. They rose from $4.856 billion in 3rd Quarter 2017.

  • A quarterly gross profit of $136.15 million.

 

  • An operating income of $101.48 million for 4th Quarter 2017.

 

  • $64.22 million in earnings before taxes for 4th Quarter 2017.

 

  • A net income of $111.31 million up from $88.99 million in 3rd Quarter 2017.

  • A free cash flow of $33.89 million for 4th Quarter 2017.

 

  • An operating cash flow of $52.43 million for 4th Quarter 2017.

 

  • Cash and short-term investments of $813.17 million on December 31, 2017.

 

  • Assets of $6.842.04 million at the end of 4th Quarter 2017.

 

AECOM is a decent little value investment because it makes cash from its business and its expenses are low. It reported operating expenses of $34.67 million.

AECOM is the way to Invest in Hyperloop

Buying ACM is the smart way to invest in Hyperloop because AECOM is a proven company with services that are in demand right now. If Hyperloop gets built AECOM can make money designing it.

If the Hyperloop never gets built, AECOM makes money because people will still need transportation and infrastructure. They will need to get around and to move freight and cargo. One growing field that AECOM specializes in is rail.

There’s also a lot of interest in expanded infrastructure out there. In the United States alone, President Donald J. Trump (R-New York) has been trying to get Congress to fund an additional $1 trillion worth of infrastructure. The opposition Democrats proposed their own $1 trillion infrastructure plan as an alternative, The Washington Post reported.

Infrastructure Future Looks bright at AECOM

It is not clear how much support infrastructure has among Republicans who control Congress; and write America’s budget, but more infrastructure spending in the U.S. is likely. Overseas massive infrastructure spending is likely on the Arabian Peninsula, in Japan, and in China.

Schemes like Etihad Rail are just the tip of the iceberg in the Middle East. The Kingdom of Saudi Arabia, in particular, is planning massive infrastructure investment including Google data centers to stimulate its economy as oil revenues fall.

With or without Hyperloop, the future for infrastructure looks bright. That makes AECOM an interesting value investment for the near future.