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McDermott International Inc. Message Board

  • mvstrategy mvstrategy Mar 1, 2013 5:21 PM Flag

    No Justification for Such a Sell-Off

    Agree, the 4Q was a disappointment; but, honestly, can anyone justify the sell-off? The company exceeded the top-line consensus and missed on eps for a host of operating factors (listen to earnings call) some of which are beyond management's control (e.g. finding skilled labor, etc.). Does it deserve to lose 15% of its capitalization in one fell swoop? Look for a tuenaround in '14 and '15. Patient money will be rewarded.

    Sentiment: Hold

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    • Atlantic continues to disappoint and it seems there is no end in sight. Barge utilization is poor.
      continued losses with Agile, Malaysia casts doubt on the profitabilty of the current backlog.
      I don't know. it seems rather disappointing. I might add some shares if we bust through $10.

      So explain to us why you think the sell-off is unwarranted. The market, so far, disagrees.

    • Patient money? For goodness sakes, why? This stock is a money maker. You buy in the 9s. Sell in the 12s. Then short it or wait until the next buying opportunity.

      The reason for the drop is HUGE institutional ownership. They are quick to minimize the loss which just feeds off itself until it's time to turn around.

      MDR has too many yards (regional segments) that must have work to hold employees, so they have to bid to attract business instead of being choosy. Didn't used to have so many segments.

      Their REAL problem is mis-managing (too much) their cash. They could be buying back stock here that would pacify markets until boom times hit.

      So it is a poorly managed company but one heck of a reliable trading vehicle for 4 times a year. Just don't fall in love. Get ready to load the boat.

      Sentiment: Buy

    • The labor problems in Mogan City are nothing new. They have exisited for almost 10 years and this is just another excuse by management for poor perfromance at an antiquated facility. McDermott has not been able to draw new people to Mrogan City for a long time and it will be unlikely that they will be able to do so in the future. Their competitors in Texas are not having problems with labor shortages.

      Sentiment: Sell

      • 1 Reply to stock_watch3r
      • Having read the cc and glanced at the qtr rpt MDR has some challenges in 2013 but mgmt clearly is positive that some if not all of the losses in the atlantic can be turned around at the end of 2013. There are a lot of moving parts and it really comes down to mgmt's ability to avoid over runs, bid on projects selectively while keeping their units reasonably utilized (a concern noted). You dont buy stocks at their apex, usually, and MDR presents a decent long term hold for a doble in 2014/15. They have enough cash even with the capex plans and are profitable although its lower than we would have liked 7-10. There are some negative posters here that havent done their dd and only are throwing out vague issues aside from the morgan city issue which I would content mgmt according to the cc is taking proactive steps to contain the cash burn there to an extent but that area according to the cc has labor issues that their competitors also face. Hold until 2014 and make 40% or more, esp if it drops to $9.... fine by me..

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