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Foster Wheeler: Solid Results, If Anyone Cares

and the discussion just died. haha.

Foster Wheeler: Solid Results, If Anyone Cares

I hold no position in this stock. I'm just trying to understand others' points of view.

About the $9B backlog. That will translate into $9B of sales. Cramer on Mad Money said that the company is trading for less than its backlog. But $9B of sales translates into about $900 M of earnings, if one uses a, seems to me, generous 10% margin multiple. So it seems not to be trading below the profit on its backlog. Then what happens after the $900M? How does one reach the remaining $5.9B of market cap from there?

Foster Wheeler: Solid Results, If Anyone Cares

OK, the growth rate is 40%. For how long?

I do not know if this company can grow at 40% for the next 5 years.

With Cisco, I'm not saying that it seems like a deal, but with Cisco, at least the growth rate seems sustainable, in part because it IS so modest, at 5%-10% or thereabouts.

Finally, I disagree with your use of the "PEG Ratio" because it's a bad ratio to use. A stock with a PEG ratio of 0.01 is not necessarily better than a stock with a PEG Ratio of 100. The former could be value-destroying, the latter, value-creating.