McDermott Begins to Recover - Oil Service Stock Seen as 'Best Buy'
By Lisa Sanders, CBS MarketWatch
Last Update: 12:46 PM ET Nov 15, 1999 NewsWatch
HOUSTON (CBS.MW) -- Shares of McDermott International rose 8 percent Monday afternoon as a brokerage issued some hopeful comments about the oil-service company that saw its market value chopped in half last week.
According to Frost Securities, the declines are attributable to poor financial performance during third quarter 1999, and the fact that asbestos-related legal claims against the company have increased.
"We recognize and agree that McDermott still has both internal and external obstacles in its path to strong ongoing financial performance," Dallas-based Frost wrote in an analyst note.
"However, we believe its stock represents one of the best buys on Wall Street, particularly in the energy sector. McDermott ... is now trading at the far low end of its peer group range."
Shares of McDermott (MDR: news, msgs) rose 5/8 to 9 3/8 amid heavy volume of 3.1 million shares vs. a daily average of 771,700.
Last Friday, the company's stock fell 35 percent one day after after declining 28 percent.
On Thursday, McDermott reported net income of $3.6 million, or 6 cents a share, which compares to $51.6 million, or 85 cents, in third-quarter 1998.
Analysts surveyed by First Call estimated earnings at 19 cents a share for the third quarter of 1999.
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