To: Captain James T. Kirk who wrote (27930 ) 8/18/1998 1:01:00 PM From: Platter Respond to
In Perspective :recent "story stock" on FGII makes the stock even more appealling as it now trades at $14.00 and recent Buyback program announced by the company...."FRIEDE GOLDMAN INTERNATIONAL (FGII) 23 7/8 +3/8. It is hard to say when all the bad news is finally in a stock, but this one might be there soon. After the close on Monday, oil services company Friede Goldman reported second quarter profits of $0.31 per share. That is three cents better than consensus expectations, but down from the year-ago operating net of $0.46 per share. (We don't buy the "pro-forma" year ago $0.34 per share for comparison sake.) Revenues surged to $88.6 million from $27.9 million, and the press release said: "The company also reported a backlog of $509 million at the end of the quarter compared to $65 million at the same time in 1997." FGII was a very hot IPO back in mid-1997 and the stock surged from 10 to 48 in about 4 months. That was late 1997, before the Asian turmoil, hit, however, and before oil prices really started to drop. FGII did make a run up to 44 in May, but has gone down steadily since. This is a company that still has good long-term growth prospects but has been battered by the realization that oil prices aren't going back up soon. The stock now trades at less than 20 current times earnings (annualizing this quarter) and not much more on a trailing 12-month basis. Wall Street is expected FGII to earn $2.10 to $2.20 per share in 1999, and if they can come anywhere close to that, this stock should rebound significantly. Of course, an earnings rebound in the oil sector is problematic, but a lot of the bad news seems to be in the FGII stock price. Given the poor performance of the oil sector, FGII isn't about to rally sharply. And, trying to pick bottoms is nearly impossible; but this one is worth watching - if sentiment improves, and oil prices rebound."
