Chris Bunge
Hedge fund analyst, long/short equity

Willbros: Strong Industry Fundamentals Will Drive Margin Expansion

Willbros (NYSE:WG) is an energy-focused engineering and construction firm that has considerably underperformed its peers. The underperformance has resulted in P/E multiple contraction. Since the weak performance, management has implemented plans and strategic initiatives to turn their businesses around. If their strategy works, WG could yield much higher earnings than the Street is forecasting. If margin expansion does not improve, then downside is limited. Given the early signs of a turnaround, I believe WG will deliver improved margins going forward and the stock could trade in $19-$21 sometime in 2015.

Business Overview:

WG has four main businesses consisting of Oil & Gas, Utilities, Professional Services & Canada.

Oil & Gas:

WG's O&G segment provides a full range of...

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