Shareholders in FTSE 250 energy services specialist Wood Group (LSE: WG.) have had a tough ride over the last couple of years. Hopes were high in July that a 230p bid from Dubai-based rival Sidara might provide a profitable exit from a difficult turnaround.
But the bid fell through on 5 August when Sidara decided not to make a firm offer, blaming “geopolitical risks and financial market uncertainty”.
This situation has left chief executive Ken Gilmartin under renewed pressure. However, Wood’s latest half-year results suggest to me that a genuine recovery’s underway. If Gilmartin can deliver on his targets, my analysis suggests the stock could be too cheap at current levels.
Performance is improving
There’s an old stock market saying that turnover is vanity, profit is sanity and cash flow is reality. What this means is that it’s easy to boost sales (turnover) if you aren’t too worried about making…
