I Know First Review: Be Careful With MDR

I Know First Review

I Know First Review

McDermott International, Inc. is an engineering, procurement, construction and installation (EPCI) company focused on designing and executing offshore oil and gas projects across the world. The Company’s operating segments include Asia-Pacific, Americas, Middle East and North Sea and Africa. The Asia-Pacific segment serves customers in Australia, Indonesia, Vietnam, Malaysia, Thailand and India.

I Know First wrote a Seeking Alpha Article about McDermott-International. on May 22nd 2015. The article argued that their stock has a bearish signal and that Investors should be careful. Q1 starts on a bad footing with cash down $52 million in comparison to Q4. Since that time, the stock price has decreased 24%.

McDermott International (NYSE:MDR) was changed by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Monday, Analyst Ratings Net reports.

According to Zacks, “Leading global engineering and construction firm McDermott International has embarked on a major cost savings initiative to shore up its finances and turn around. On another positive note, the company received a large number of new contacts of late, thus adding to it’s already robust backlog. Additionally, McDermott’s broad product portfolio insulates the operations to a large extent. But with half of its current backlog related to offshore operations, the company remains susceptible to the pricing weakness that has affected the offshore drilling industry as well as the energy sector at large. This accounts for our conservative stance on McDermott.”

MDR traded down 4.282% during mid-day trading on Monday, reaching $3.465. The company’s stock had a trading volume of 1,703,688 shares. The firm has a market cap of $828.04 million and a PE ratio of 119.483. The mean estimate for the short-term price target for the company stands at $8.49 according to 8 Analysts. The higher price target estimate for the stock has been calculated at $30 while the lower price target estimate is at $2.

MDR forecast

(Figure 1: AMD forecast 22nd May ’15)