"Everyone has a plan 'till they get punched in the mouth" - Mike Tyson

March 07, 2013

Willbros

So you are probably wondering why we keep bringing up WG.  It's nothing more than a single digit over levered oil services company right?  Well....

Well, everybody talks about how awful it is that the Fed manipulates rates etc.  Most also fail to realize what a big buffer this is to highly levered companies.

We're in an era where unprofitable companies with strong businesses and decent management can use all sorts of software and other tools to figure out their problems and solve them.  With low interest rates, companies like Willbros can continue to re-structure debt until they figure out what they need to be consistently profitable.  They clearly understand the need to de-lever, as they understood the need to lever up and invest in the energy boom.

One concern out there may include falling energy prices, but they aren't involved in the drilling and exploration side.  They are more largely involved in the infrastructure side.  These guys do business in the Bakken and up in Canada.  We do know that this infrastructure build is still multiple years from being completed.

They posted results Wednesday  afternoon (early with concerns about leaked statements).  Numbers were solid, with hints of profitability appearing.  Here is a long term price map. Currently the stock is in a cup with handle pattern that breaks out over 7.50.




I'm not long.  I am considering it, but I mainly just wanted to share what I believe to be a great, underloved opportunity in the North American energy boom. Follow me on twitter/stocktwts @aro618 for more real time ideas.

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All ideas shown on this blog represent the authors opinion based on the data available.