Foster Wheeler (FWC) beaten down but why

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Non-Tech Foster Wheeler (FWC) beaten down but why

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To: JR2 who wrote (11)	3/10/1999 10:04:00 AM
From: Loretta Fern	of 24

Just began looking into FWC. According to Value Line the 1999 book value is $17.30. Another factor to consider in its low stock price is that it is a small cap stock. As this sector has done poorly there is probably a disproportonate decline in the stocks price relative to large cap issues like FLR. With a dividend yield above 6% and good 3-5 year price appreciation potential, Value Line has FWC ranked 6th best in regards to 3 to 5 year price appreciation potential. This potential is dependent on Asian economies rebounding, oil prices rising, and more market interest in value and small cap issues. If one wants to buy and wait, some money could be made on the dividend and selling covered calls until the above mentioned factors materialize. IMO, downside risk from here should be limited, though that appeared to be true when the stock price was around $20.

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To: Loretta Fern who wrote (12)	3/10/1999 11:13:00 AM
From: Evan	of 24

Management don't have the courage to do what it takes. They keep paying the dividend even when losing money.The market leader in this sector is Fluor,similar problems.The E&C market is depleted.Jacobs (JEC)the only company that has done well on stock price. All the profits in this sector, as percent of gross sales stink.

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To: Loretta Fern who wrote (12)	3/11/1999 9:25:00 PM
From: JR2	of 24

< Thanks Loretta > I don't think this stock is a small-cap....maybe more like a mid-cap. I'm starting to get long this one...but not because of the div.... I understand that at least one or maybe 2 International Companies...would find these guys a great FIT...and would grab them for 1 1/2 times book. Hint : Boilers ---- Turbins ( How do you spell "turbins" )

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To: JR2 who wrote (14)	3/12/1999 1:25:00 AM
From: Loretta Fern	of 24

Your very welcome. May be a trivial point but with 41 million shares outstanding and a share price of 12$ market cap is under 500 million. I think mid-caps are in the 1-5 billion dollar range. I will be speaking soon to one of the construction managers for FWC and will post any relevant thoughts he has on the company.

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To: Loretta Fern who wrote (15)	3/12/1999 12:15:00 PM
From: Michael Bakunin	of 24

Weighted average market cap of the Russell 2000 index is under a billion; FWC is solidly in the size range of that index.

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To: Michael Bakunin who wrote (16)	3/12/1999 6:22:00 PM
From: JR2	of 24

Not when the stock trades where it has historically....25 plus. When you see it near 20 this summer, it won't matter. Hint : Turbine / Boiler I went back to school today.

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To: wolfgangl who wrote ()	3/17/1999 11:31:00 PM
From: Loretta Fern	of 24

Spoke to an employee of FWC for some background on the company. FWC has been around for 110 years and have fairly conservative management. The main point he made is that they are best as a niche player in the petrochemical arena. As this sector comes back they can do quite well. Have the best of technologies in areas that I am not familiar ie. delayed coker technology. FWIW he was buying more of FWC's stock.

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To: Loretta Fern who wrote (18)	3/19/1999 4:45:00 AM
From: wolfgangl	of 24

Loretta, thank you for your most valuable post. I checked insider trades at Zacks and Yahoo. There were only buys since December. The $1.000.000 question at present might be, if the oil price will recover. I believe, that this could happen, when Japan will have bottomed out. To a lesser degree if OPEC manages to limit capacities. TA shows that we might have a bounce in a downtrend for both the Nikkei and the oil price. Latest reports on the fourth quarter in Japan were very disappointing. Volatility in FWC has almost dried out, a downward mid term trendline was broken, but the price is moving sideways rather than upwards. Something could happen any time. We ought to be vigilant in order not to miss a rally. I would buy only after it started. SLB as well as the oilprice seems to run into resistance soon. The rally could be over already. Thanks again for your research efforts, Wolfgang

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To: wolfgangl who wrote (19)	3/23/1999 9:12:00 AM
From: D. K. G.	of 24

periscopeanalytics.com Tuesday Morning Conference Call Foster Wheeler is selling at a 52-week low, and its valuations are too cheap to ignore. Foster Wheeler has a market capitalization of $488 million. Over the last twelve months, the company has generated sales of $4.6 billion. That gives the company a price-to-sales ratio of 0.11. Foster Wheeler is over 100 years old. It was created in 1891 to build condensers and pumps for the newly-invented steam turbine engine. Today, Foster Wheeler is based in Clinton, New Jersey and the company is organized into three business groups: the Engineering and Construction unit builds chemical, petroleum, and resource recovery plants; the Energy Equipment unit makes steam generating equipment; and the Power Systems unit operates cogeneration and independent power plants. There is an insatiable demand for power in foreign countries, which has led CEO Richard Swift to make acquisitions to extend the company's global presence, particularly in developing countries. Currently, more than two-thirds of the company's revenues come from overseas. Foster Wheeler has a subsidiary in Chile and is involved in manufacturing joint venture in China. The company has contracts in Finland, Turkey, Portugal, Taiwan and Mexico. Foster Wheeler's stock has been punished down to $12.50, falling from a high of $47 set back in late 1997. The reason for the decline is lack of earnings. The company has lost $42 million over the last two years, owing to losses at its Robbins Resource Recovery unit, the restructure of its European operations and an exorbitant increase in taxes. But Richard Swift thinks all the charges, restructuring and tax penalties are behind the company, and it is poised to once again bring black ink to the bottom line. Foster Wheeler has a backlog of $7.2 billion, which is about a year and a half worth of work. The company should book about $5.4 billion in revenue in 1999, and if Mr. Swift can reduce the company's debt level, which currently stands at about $850 million, it could make $1.70 per share this year. At $12.50, that gives the company a price-earnings ratio of 7.4. Foster Wheeler is a fallen angel. It has reported losses for two straight years, leveraged itself to the hilt and mismanaged some foreign operations. And investors have fled the stock, leaving it battered and bruised. That's the best time to buy. When everybody else is saying sayonara, savvy investors are saying opportunity. Foster Wheeler is a strong company that will right itself. The paltry valuations make the stock too cheap to ignore. ----- Hello Wolfgang, thought you might find this interesting. Please read the website's diclaimer, the report offered gives a nice synopsis but you need to discount their motives. They've made some good calls (DDDDF) in the past, so they are not out to pump and dump stocks.

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To: D. K. G. who wrote (20)	3/26/1999 2:25:00 PM
From: Evan	of 24

They only have one problem,they don't know how to make money in the present market conditions.Jack Welch would have a heart attack if he looked at FWC books.

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