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Woodward: A Unique Opportunity At A Crucial Time

May 06, 2020 3:10 AM ETWoodward, Inc. (WWD)BA3 Comments


  • Woodward, Inc. recently scrapped its all-stock merger with Hexcel Corporation amid the coronavirus crisis.
  • The companies no longer believed the deal made sense given the crisis in the airline industry.
  • Woodward, Inc. also recently requested to reinstate its former CFO, Bob Weber Jr., due to the economic effects of the virus outbreak.
  • The company recently furloughed 11% of its staff and is taking additional measures to preserve financial strength during this period of uncertainty.
  • This article focuses on the fundamentals and what the real value is versus the current share price.
  • Looking for more stock ideas like this one? Get them exclusively at Good Stocks@Bargain Prices. Get started today »

Woodward, Inc. (NASDAQ:WWD) recently announced its plan to end the merger with Hexcel Corporation amid the current coronavirus pandemic. The all-stock merger, which was agreed upon in January, would have combined the complimentary companies scale. However, both believe that successful integration would not be possible during the crisis. Once merged, the company “would have been one of the world’s biggest aerospace and defense suppliers” with significant free cash flow.

The company recently announced many changes related to the COVID-19 global pandemic. It furloughed 11% of its entire staff, with plans to further reduce the workforce an additional 4% throughout 2020. The company requested to reinstate former CFO Bob Weber Jr. to assist with the financial implications and economic impacts of the crisis. Additionally, Woodward, Inc. plans to preserve financial strength by enacting workplace management through hiring freezes, reducing company officers’ salaries and directors’ base retainers, implementing a company-wide wage freeze, eliminating 2020 bonuses, and reducing all non-essential costs.

While current news stories, good or bad can sway our opinion about investing in a company, it's good to analyze the fundamentals of the company and to see where it's been in the past and in which direction it's heading.

This article will focus on the long-term fundamentals of the company, which tend to give us a better picture of the company as a viable investment. I also analyze the value of the company versus the price and help you to determine if WWD is currently trading at a bargain price. I provide various situations which help estimate the company's value. In closing I will tell you my personal opinion about whether I'm interested in taking a position in this company and why.

Snapshot of the Company

A fast way for me to get an overall understanding of the condition of the

If you want to find good companies at bargain prices that will provide you with long-term returns and dividends in any investing climate, then my Seeking Alpha Marketplace service (Good Stocks@Bargain Prices) is a good match for you. 

This article was written by

Grant Gigliotti profile picture
For Investors looking to find Good Stocks selling at Bargain Prices.
Grant Gigliotti is the founder of Beat The Market Analyzer, which offers the BTMA Stock Analyzer. He focuses on the value investing strategies of Warren Buffett and Benjamin Graham to find good companies at bargain prices. These companies have a long-term history of strong fundamentals and he aims to buy them at a large discount from their intrinsic value. He buys with the mindset of holding for the long-term, but is willing to sell for a reasonable short-term gain when the market price is greater than his estimated value of the stock.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in WWD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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