Gordon Tam, CFA
CFA, value, www.top10invest.com, long only

Babcock & Wilcox: A Bright Outlook In 2015

At first glance, Babcock & Wilcox Co (BWC) trades close to 52 weeks low, the forward P/E multiple of BWC is 10.88x, and the EV/EBITDA ratio is 5.67x. All metrics indicate value for prospective investors. Upon further analysis, I also find that there is a bright 2015 outlook for the depressed Power Generation Group "PGG", expecting growth of 10-20% in 2015. Combined with a self-help restructuring initiative of 2-3% margin improvement and a sizable repurchase program, I conservatively calculate that BWC should generate about 10% returns for its shareholders over the next year.

Business Overview

BWC consists of several segments, including Power Generation Group "PGG", Nuclear Energy, Nuclear Operations, Technical Services, and mPower: (more details of each segment are shown

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details