The folks at the Sovereign Society are pretty well-known for getting into a lather about the demise of paper currencies, and the need to get your money offshore, but they do also talk about more mainstream investments. And who knows, they might end up being right about the other stuff — fiat currencies have a pretty short and troubling history, and controlling the value of the currency that you use to borrow money certainly offers a tempting “free money” way out for governments who serve pain-averse constituents.

But you can read all about the demise of paper money, the terror of debt, and future hyperinflation, and guns and gold in lots of places, and from folks who have far more conviction than do I on the matter. So let’s just look at an actual stock that they’re picking — yes, it’s not even a gold miner!

Here’s now the Sovereign folks pitch it, after explaining that they think the infrastructure needs of the globe will be massive for years to come, from rebuilding and revitalizing the old stuff and building the infrastructure for a new energy era:

“Let me introduce you to our #1 pick for the new era ahead.

“It’s one of the world’s biggest builders. It’s been around for 98 years. And it is likely to be around for another century and beyond…

“This company built the world’s first major oil refineries. In the ‘40s it began moving into natural gas plants. In the ’50s it was one of the biggest nuclear power plant builders. In the ‘60s it diversified into offshore drilling and mining. It even built America’s famous energy artery – the Alaska pipeline.”

Sounds like it has some potential, no? There’s more …

“Today you’ll find this company’s creations on all 6 continents…

“It designs and builds many of the world’s most complex and challenging structures.

“And in addition to all that, it has become one of the leading builders of the infrastructure for a broad variety of alternative energy sources, including solar, wind, biomass, geothermal, coal-to-gas, coal-to-liquids and liquid natural gas.

“In short no company is better positioned to take on the ambitious goal of retrofitting our planet for our new energy future.

“The company already gets much of its revenues from government spending. And with trillions of stimulus dollars earmarked across the world for alternative energy projects this trend will only accelerate, just as it did during the last depression, catapulting engineering giants like itself to the very top of the investment heap.

“Fortune Magazine has repeatedly ranked this company #1 in its engineering and construction category on its annual survey of America’s Most Admired Companies.

“Add its impeccable balance sheet with no debt, tons of cash, soaring revenues and profits, a dividend yield of 1%, a PE of 12, plus its extraordinary growth potential, and I’m sure you’ll agree that this outstanding company is grossly undervalued.”

Ah, well, sometimes the Thinkolator needs to sit back, put up its feet, and take a wee rest. This one is clearly:

Fluor Corp. (FLR)

And yes, they are one of the biggest engineering and construction firms in the world, with a long history that began 98 years ago with a small construction company serving the oil and gas industry. And I don’t know where you come down on the great “continent” debate (whether North and South America are separate, or Europe and Asia, or both), but I always learned that there were seven of ’em, and Fluor has offices in six of those. I have no idea whether or not they’ve ever done any work in Antarctica, but they certainly have done plenty of cold weather work.

Compared to many of the tiny and speculative stocks I write about, Fluor is a rock-solid giant with a market cap of $8 billion and more than $2 billion in cash — it’s hard to argue against numbers like that, though from this large size they’re unlikely to put together dramatic earnings growth numbers in the years to come. Their margins look pretty similar to the other large engineering firm that I often see mentioned, Jacobs Engineering (JEC), and for both companies analysts see the deterioration in sales (ie, “negative sales growth”) continuing in 2010, followed by a resumption of growth in 2011 — for FLR, analysts on average see them earning somewhere between $3-3.40 in 2010 and $3.25-3.70 in 2011 (depends which analyst survey you watch), so the forward PE ratio is somewhere in the neighborhood of 14-15 whether you’re talking about 2010 or 2011, with the expectation that growth will pick up to something like 10% a year for the next several years.

Certainly reasonable valuations, and with $12 a share in cash FLR looks even better (you can use that to pad the PE ratio to more like 11 if you like, or to project future dividend increases, though FLR has not been terribly aggressive at upping its payout in the past — and these kinds of firms that work on long, super-expensive projects and carry heavy receivables often like to hold a lot of cash).

It probably also pays to note that although most of the construction and engineering companies are expected to follow much the same trajectory and continue seeing better performance from improving capital expenditures among their client base, these are among the most cyclical of companies — in Fluor’s case, as with many of its competitors, the global economic activity slowdown over the last year was painful, as was the collapse in oil prices that shelved some projects, so if you think the economy will take another hit and the recession will re-intensify before things improve, these firms could easily see their expectations of brighter days dashed on the rocks. FLR looks quite reasonable here if you’re looking for a reasonable stable large-cap engineering company and think the global infrastructure spending will continue to grow, though I don’t own shares personally — let us know with a comment below if you’ve a Fluor feeling either way.