Foster Wheeler (FWC) beaten down but why

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Previous 10 Next 10

To: Evan who wrote (2)	8/9/1998 3:53:00 AM
From: wolfgangl	of 24

Evan, I judge my understanding of US English language quite good, but what does mean "lump sum turn key bidding"? Would you please elaborate a bit more on why there is no turnaround in the near future? I regard this stock technically way oversold now. Your eager student, Wolfgang Lauer

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

To: wolfgangl who wrote (4)	8/9/1998 4:03:00 PM
From: Evan	of 24

Wolfgang. Lump Sum Turnkey Bidding is the common method for oil and chemical companies to complete projects.The contractors bid against each other for a fixed price to design,procure and construct a plant.Cost overuns,which are common,are a loss for the contractor.FW is no better at it than the others.Most of the projects are located in Asia,Middle East or Africa.Best analysis of these companies is profit versus billings. Most make less than 5%.The premium company is Fluor which sells for 57% off its high. A turn around for most of these companies would occur if the price of oil goes over $20 a barrel. FW is about a fifth of the size of FLR and I dont see it getting any bigger.

Share	RecommendKeepReply Mark as Last Read Read Replies (2)

To: Evan who wrote (5)	8/10/1998 6:51:00 PM
From: Paul Getman	of 24

My source for FWC's book value is Value Line, which publishes several updates each year on FWC (and the other companies it follows). Although Value Line wasn't recommending the stock at the time, in its last report it did say that FWC, over time, offered exceptional value--and that was when the stock was $27. FWC's press releases can be found on the company's web site, fwc.com; look for the press release titled: FOSTER WHEELER CORPORATION SAYS 2ND QUARTER EARNINGS ARE EXPECTED TO BE IN LINE WITH STREET EXPECTATIONS I appreciate the comments about the very poor industry conditions facing the E&C companies right now, particularly with Asian deep in the hole and oil prices at very low levels. But that doesn't explain (to my satisfaction) why FWC has suffered so much relative to Fluor, which also has a huge exposure to Asian and to the energy market. Paul

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

To: Paul Getman who wrote (6)	8/10/1998 10:09:00 PM
From: Evan	of 24

Paul.I dont know the specifics of the recent drop other than the industry trend.I wonder if it could relate to the large percentage of their work being done at FWC France and how this will relate to the company bottom line. It would be interesting to know who dumped.

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

To: Evan who wrote (5)	8/11/1998 2:32:00 AM
From: wolfgangl	of 24

Evan and Paul, thanks for your posts. The only additional point that I can think of in order to explain current low valuation is institutional percentage held, which is 82% for FWC. This is very high. I observe similar constellation with other tanking issues like Brunswick and Parker Hannifin. Both have reasonable fundamentals, high institutional percentage held but are not in the oil service sector. Are institutions generally discharging stocks? Wolfgang

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

To: wolfgangl who wrote (8)	8/11/1998 9:23:00 PM
From: Evan	of 24

Wolfgang. It could be some institutional investors repositioned themselves and caused the drop in price. It may have created an undervalued stock in a poor market sector.If the overall market declines then this sector will also decline.

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

To: Evan who wrote (9)	9/15/1998 11:16:00 AM
From: Evan	of 24

May be time for a wake up call for FWC.The engineering and construction group have been dogs for two years and FWC was beaten down the most in the major players, with due cause.A turn around seems to be imminent and several insiders have bought in the past year at twice the current price.

Share	RecommendKeepReply Mark as Last Read

To: Evan who wrote (7)	3/9/1999 9:16:00 PM
From: JR2	of 24

< No fainting please > This thread does indeed exist. This stock is tooooooooooooo cheap. If Asia is bouncing back then so should this "oldie but goodie" ! Anyone know what the Book is ?

Share	RecommendKeepReply Mark as Last Read Read Replies (1)

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.

Share	RecommendKeepReply Mark as Last Read Read Replies (2)

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.

Share	RecommendKeepReply Mark as Last Read