FGH mini recap
Posted on Webcrawler:
"To all the doomsday soothsayers: FGH has seen litigation in the past as well as other shipyard/repair entities; its the nature of the beast. I represent many oil patch and vessel repair and building companies and litigation is not a barometer or success or failure. The fact the arbitration, binding or not, is occurring and not full blown litigation is a good sign. FGH is a well respected company and the announcement of Corp. officer change is another good omen. Exploration in the gulf is opening up and many of the service and supply vessels are reaching the end of their useful capacity creating a demand for shipbuilding and exploration appurtenances. FGH will help fill this void.
stilwell1 FGH rating: Strong Buy, Target Price: 15.00 by 08/06/00
Posted by: stilwell1 on 03/29/00 - 7:57 AM (Pacific)"
quicken.webcrawler.com
Comment: I agree with the above post. Additionally, it appears obvious that the known negatives have already been factored into the stock price. The 8k will be the first report to include consolidated real information (sans proforma) since the merger. Competition among the fab's has been intense.
For example:
UFAB - "``Our operating results for the quarter were pressured by reduced margins brought on by the increased competition for those limited projects being awarded,' said Dailey J. Berard, President, CEO and Chairman of the Board." "Backlog at December 31, 1999 was approximately $18.4 million."
biz.yahoo.com
GIFI - "The continued low activity levels in the oil and gas industry is reflected in the Company's backlog at December 31, 1999 which was $38.9 million as compared to $67.3 million at the end of 1998."
Demand for the Company's products and services has remained low for the past two years. The resultant low level of backlog of projects, with reduced profit margins, resulted in a weak performance for 1999.
During 1999, the Company's work force declined from approximately 1,100 to 850 employees. Due to recent reduced demand for the Company's products and services, the Company does not anticipate the need to engage a material amount of contract labor in the foreseeable future."
biz.yahoo.com
Stock prices of the above companies are significantly ABOVE 52 week lows and report per share (total) backlogs significantly BELOW FGH's per share backlog in recently announced NEW business, only. Of the 3 companies, it appears to me FGH should demand a market capitalization premium above equity significantly above the other two. The reverse is currently a fact. I fully expect this disparity will correct in the very near future.
Absent unanticipated new negative information in the 8k, I expect a significant increase in stock price following release of the consolidated information. Low volume of recent days indicates parties interested in this issue are taking a "Wait & See" attitude. Over the past several months, I have suggested it has been the absence of consolidated company information which has contributed significantly to stock price weakness. True or not, we'll know by next Thursday.
Value investors who have stuck it out (dollar averaged and accumulated additional shares) this long would be ill-advised to sell out before the 8k is released. I expect some very pleasant surprises in the annual report, recapture of income taxes and tax carry-forwards being one of them. FWIW
Good luck to all
SargeK
Info for tax buffs:
With regard to the tax ramifications, Combined earnings before tax, (EBT), taxes and net income for (FGI/FGII & HLX) were as follows:
EBT 1997 - $58.22m, 1998 - $87.69m
Taxes 1997 - $22.81m, 1998 - $29.88m
Net Income - 1997 $35.41m, 1998 $57.81m |
