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   Gold/Mining/EnergyUFAB - oil drilling deck fabrication


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To: Donaldm who wrote (294)3/16/1999 9:25:00 AM
From: SargeK
   of 337
 
The acronym "DFWS" is a warning!

See if you can figure it out.

SargeK

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To: SargeK who wrote (282)3/16/1999 12:04:00 PM
From: SargeK
   of 337
 
Subject: Unifab International, Inc. 'UFAB' Earnings/Growth Analysis - Update

I had a telephone chat with Mr. Peter Roman/VP/CFO/CAO recently and prospects for the company were discussed. Earnings for the quarter and fiscal year ending 3/31/99 is expected to be in the range of $.27 to $.36 and approx $.35 for the next quarter (1Q/00) ending 6/30/99. Mr. Roman indicated that it appears that earnings forecast* for FY/00 may be optimistic. He indicated he was more comfortable with $1.50 than the analyst concensus of $1.95 biz.yahoo.com . The latter forecasts derived primarily from projecting trends at the Lake Charles facility prior to the business downturn in the sector, which in retrospect were ambitious. He further indicated that a pickup in activity @Lake Charles (LC) could make the $1.95 attainable; but, at present sees a $1.50 as more likely.

Asked about concensus earnings growth forecasts* of 34.3% over the 5 year business cycle, Mr. Roman indicated that absent a more favorable business environment, he would be more comfortable with 20% growth forecast for the time period. Asked about earnings contributions by Allen (acquired last year), he stated the acquisition is already contributing and is reflected in the numbers just expressed. A pick-up in activity and with further acquisitions which are being considered , the higher forecasts could be attainable. The statement was made that further acquisitions (should they occur) would be funded primarily with stock not long term debt, pointing out that he thought more shares (increased float) may benefit stock holder liquidity.

The potential for UFAB to outgrow its competition is focused on the Lake Charles (LC) facility which continues to be developed. Development of this facility was slowed due to the business downturn in the sector. When completed and with 'Allen Process Systems' capability to work the top side of FPSOs, The Company will have the capability to convert a ship or barge into an FSPO and they will have a shipyard with deep-water access to the GOM to do it in. UFAB has more acquisitions in mind; but, at present the Wild Card to growth is Lake Charles. Lake Charles is going from ground zero and whatever they add to the equation and whatever synergy is developed will be key to future growth. Some dredging is is on track and should be completed in the June quarter. If things go according to plan full operations are anticipated between Sep and Dec, next year. Quoting Mr. Roman directly per phone call received just ten minutes ago: "At April 1, 1998 we employed approximately 130 in LC. Today we have around 60. However, the comparative manpower numbers in LC are not relevant. They fluctuate with projects and will not be stable until the facility is completed and running, which is where we are heading."

SUMMARY: I have accepted the more modest estimates expressed herein to develop the basis for a new model for predicting more reliable and sustainable future earnings growth and to develop stock price targets during a period of an anticipated more favorable business environment. Using $1.50 for FY/00 earnings and 20% annual growth with an increasing P/E multiple gives us potential prices of $12.00 (near term, 1-6months/with a P/E of 8 * $1.50). Starting with $12.00 as an attainable, near term target, we can forecast stock prices of $18. ($1.80*P/E10) for next year, $26.00 ($2.16*P/E12)/2001, $34.00 ($2.60*P/E13)/2002, $44.00 ($3.12*P/E14)/2003..etc..(rounded to nearest dollar).

I have used very modest multiples when relating present earnings with sustainable 20% annual growth. P/E14/2003 is less than half the current S&P500 P/E of 28.9 and UFAB potential growth rate is almost 3 times the 7.2% anticipated growth rate of the index. biz.yahoo.com This model is considerably more conservative than Zacks or IBES estimates both in terms of earnings, potential earnings growth, and P/E multiples. Completion of the Lake Charles development and possibly new acquisitions may add to earnings growth potential. A more favorable business climate over the next few years may augment this potential.

*The concensus earnings forecast reflected on YAHOO and elsewhere exemplify the deficiencies in static computer modeling of future earnings trends based on brisk; but, sometimes brief, business activity which turns out to be unsustainable. It also helps explain significant stock price gyrations especially with Small Cap companies.

Confirmation of this information and/or my interpretation may be obtained by calling: Mr Roman at 318 367-8291 or E-Mail to: Roman@net-connect.net

SargeK

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To: SargeK who wrote (297)3/16/1999 2:39:00 PM
From: andrew r harwood
   of 337
 
well you dont seem to take criticism to well .anyway time will tell ,i happen to own both unifab and global with a significant holding in both .personally wish i hadnt bought either as i have lost a significant amount on both but more in fact on unifab .i wonder how those people who bought in the 40,s feel about it right now.anyway am going to hang on to unifab but personally doubt that it is going to reach anywhere close to 20 $ anytime within the forseeable future .it will be interesting to see how there profits pan out compared to what you have posted.
also heard yesterday that there has been some significant insider selling of global recently and i think it may have been by an entity owned by bill dore but dont have any specific info .
anyway i would be happy if i get my money out of uifab so i can redeploy to more prmising areas .arh

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To: andrew r harwood who wrote (298)3/16/1999 2:51:00 PM
From: SargeK
   of 337
 
I take criticism just fine. I just wanted to point out if you want to tout GLBL, use their board. I didn't notice your name among posters over there.

K

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To: SargeK who wrote (297)3/20/1999 8:36:00 AM
From: SargeK
   of 337
 
Absent Demand the MMs can BUY CHEAP!

--and so can you. Hell, if you can't beat 'em, join 'em!. I added more shares @ 71/2. Investors that sell a 'growth' company at these levels in this very positive emerging sector environment are throwing money away. Great! I am here to catch as much as I can.. The low volume provides strong evidence that there is no panic selling.. A few traders taking profits following the 30% run-up and a few longs attempting to play the spread. Good luck! That is what makes the market. I'll just keep accumulating the dips in UFAB with bucks generated by the VTS run-up, for example.

Since my last recap on UFAB, crude prices have sky-rocketed providing strong support to the 30%+ growth forecasts by the analysts. I am happy to be wrong with my more modest prognostications of an anemic growth of only 20%+ over the next five years.

K

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To: SargeK who wrote (300)3/23/1999 9:39:00 AM
From: SargeK
   of 337
 
Unifab International (UFAB)..Great Company - Great Expectations!

Research: biz.yahoo.com

Industrial Ranking: biz.yahoo.com

Analysts Recommendations: quicken.com

SargeK

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To: SargeK who wrote (301)3/29/1999 7:26:00 AM
From: SargeK
   of 337
 
Unifab Universal, Inc. - (UFAB)- Focused on Growth

From the Prospectus: (New Iberia, La) "The Company estimates that its current facility could accommodate a workforce of more than double the 408 workers employed by the Company at July 31, 1997. The Company intends to continue its efforts to increase its skilled workforce in order to increase the Company's production capacity." Note: The Company has over 200,000SF of covered work space to accommodate future increased growth in production.

The Company's acquisition of Allen Tank, renamed Allen Process Systems, LLC this past year has broadened Unifab's focus and increased international marketing of their 'Total Project Capabilities'.

Because of the industry downturn the deep water facility in Lake Charles has developed slower than expected; however, the Company remains optimistic that it will be the Company's cornerstone in the future, and will allow them to offer world-class capabilities in concert with UNIFAB service. Dredging @ the LC Port facility (which provides deep water access to the GOM) is scheduled for completion within in the next few months.

SUMMARY: By further development and enhancement of its facilities and through acquisitions the Company is well positioned to reach the more optimistic growth forecasts and with the continuing crude price recovery a major impediment to significant earnings growth appears to have been removed.

SargeK

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To: SargeK who wrote (302)4/5/1999 12:33:00 PM
From: gpphantom
   of 337
 
Sarge,

Just started my accumulation - in at 7 5/8

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To: gpphantom who wrote (303)4/5/1999 6:16:00 PM
From: andrew r harwood
   of 337
 
well i wish you good luck i jst got rid of mine at a considerable loss .what will happen is that in the first phase of the bear market that we are now in in oil and gas service companies the rig owners and the boat people will be the ones most affected because thats what the drilling companies will turn off first ,this has already happened .but they will also be the ones to recover the quickest .the fabricators like unifab will tend to hold up a lot better since they have preexisting orders for platforms on finds already made . however their downturn will tend to be longer and they will be the last to recover .
a good number of people that i know in acadiana some of whome are knowledgeable about the company have been selling even at these depressed levels ,most prefer global industries .so while unifab is a lot better buy at these depressed levels compared to a year ago i decided to sell because i figured i could find a more productive place to put my money .i think you are in for a long wait .just my personal opinion of course .arh

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To: andrew r harwood who wrote (304)4/5/1999 8:49:00 PM
From: gpphantom
   of 337
 
Thanks Andrew, I note and appreciate your perspective.

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