the stock is not down anything like Nov 11,
The asbestos issue is a done deal by court action
instead of lawyers. Now McDermott must get down to
business and PR work.
The value of McDermott (MDR -
B&W) is a lot higher than this close.
MDR for long term basis, because of tax reason, Iam
not a short term owner, it will rise shortly as it
did when it was oversold back in Nov 1999 (when the
news was really negative).
So, my goal is one
or two years from here.
recover, the negative issue is gone.
the oil service sector retreated as a whole tues.
And mdr was down to in concert with all the so called
neg. News. Adding more on any dips and still long and
strong. 40% of ira in mdr.bght at 18 and quaded up at
7.75. Holding for long term or 30s.
Are you not aware of the fact that the entire oil
industry was at a near standstill in Q4 of last year?
Capital budgets were on hold, major projects were being
deferred, the entire industry was in a state of
consolidation, bla, bla, bla. This is what is unique about the
oil industry. A turnaround happens quickly once oil
prices are seen as sustainable above $20/bbl. That has
happened, and operators are gaining confidence (and sorely
needed capital) to resume exploration, and development
projects. This will drive MDR toward a higher level of
activity in construction which will greatly contribute to
profitability in 2000.
This period is a very good time
to buy this stock at a low price IMHO. This one is a
buy and hold for 12 months. The oil industry is
slowly recovering; MDR is well positioned, too.
1. 60% of the business will not be subject to
asbestos claims. wallstreet and the institutions will
eventually evaluate them free from any future claims (this
is worth much more than $10/share),
of the remaining business is oil platform and
construction - a sector that mdr is a leader in and is set to
3. fuel cells are hot - mdr's
investors will insist on mgmt. unlocking this value or they
will be ousted, and
4. bw will be valued at $0
for now - no big deal and a positive because its been
assigned a neg. value since the debacle late last year
because of its perceived unlimited liability.
luck to all
MDR has a book value of $14. Of course this does
not consider the liabilities forthcoming but one
thing is for certain, the stock price has considerable
cushion built in on the downside. One thing grabbed me in
the earnings, the backlogs grew big time! Another
thing, the last two days in after hours trading the
stock price shot up. I'm betting someone is
accumulating. Oil prices are high, backlogs are growing, my
money is betting on a comeback. The only question is
when? We will all have to wait. The chapter 11 thing
bothers me. This tells me that it could get ugly. This
does tell me that MDR believes they can win and come
out ahead. If they broke up the company, that would
have been worse news from my perspective indicating
that they wrote off the portion broke off. I am in for
the long term. Good luck all!
If it was'nt for the Business Week article where
James Marquez of Bayou Securities said he expects
McDermott's board to move toward breaking up into three
companies, because the value of its parts is worth more than
its current stock price.
I believe MDR would
be down to $7.00, instead of $10.00.
fact that the courts did not question the 2
Canada plants that make up the Power Generation
division. The 40% revenue is no longer factual with these 2
being carved out of the bankruptcy. I hope this is good
for the shareholders and if it stands then profits
from these fossill plants can be funneled into profits
for the corp thereby circumventing the bankruptcy
profits that have to be set aside. As you said the judge
may just be an old home boy. I could see where after
a few months after approval of BR they could then
shift the rest of fossill work to Canada and let the
others dry up and file a 7. Just guessing
Listen to what gr8jaja (a lawyer) says: the
bankruptcies will drag on and on and the judge may require
bigger contribution to the trust fund!!!!
who is gonna pay for the additional
Remember, MDR is asking a bankruptcy court to decide all
present and future claims... There are no guarantees, the
judge will do so. No guarantees litigants will not
appeal for a bigger share. Look at tobacco cases. Look
at Philip Morris.... Judge may throw the whole thing
out next year, then what?
In the mean time,
biggest earning generator will not be contributing a dime
to the bottom line....
Asbestos threat is
pretty much there, it is just suspended while bankruptcy
is in progress.
And to the uninformed poster
who still believes that there is $10/share in the
bank; you are about 8 months out of date. That money is
gone!!!!! No more.