TraderMark

Why I'm Buying Foster Wheeler on Its Earnings Miss

VSD, I wish I could see the margins on said bookings. WHile I agree its not an end all be all, one thing I like in this sector as a whole is the visibility from the book of business. Many a technology company or various other sectors would hope for such a thing. But, it's not the only thing. I do like where their book of business is and *what* their book of business is, say versus a URS or PCR. Honestly I have FLR too and I thought both reports were impressive. FLR just made the current Q number.

I find people pick and choose favorites in this sector based on the most recent Q. A few quarters ago MDR was my top position and it was going like gangbusters. Then a "disappointing" quarter and you'd think the company was going out of business. People only have 90 day windows in this day and age -this is a very difficult business to have a 90 day window on... BUT FWLT might be an underperformer for next 90 days until their next earnings report when all will be forgotten. But I find their valuation compelling vs JEC, FLR etc. And again I like the Middle East exposure - hard to find companies who are exposed so fully to those petrol dollars.

If the market tanks I can see FWLT selling off, but if we have a stable market I can see it basing here in the low to mid $60s for a while, before remounting a new run. Unfortunately I am very wary of the market so we could see a reversion back below key technical levels, but I'd be even more interested at lower levels. Valuation on 2008 estimates (even if a bit high as the bears might argue) is becoming very compelling the lower we go.