Chalk it up to kismet.
In my piece yesterday on Transocean's
Also yesterday, subsea engineering outfit Acergy SA
Issues I identified nine months ago still weigh on this company. Actually, it's really just one issue. Big contract awards in West Africa continue to be delayed. Like any contractor, Acergy's earnings are lumpy, and depend on landing the occasional megaproject. This quarter, backlog actually shrank a bit.
Of course, Acergy isn't just sitting on its hands. The company polished off African projects for Total SA
Just like last quarter, the company's profitability, measured by adjusted EBITDA margin, was impressive. Acergy's effective tax rate remains high, which makes the company look pricey if you just look at the P/E ratio. But if you look at EBITDA or operating income, Acergy trades at a discount to its peers. The company has real financial fortitude, and recently completed a $300 million share buyback while maintaining a net cash position.
I was early to sound the all-clear last quarter, but I remain convinced that Acergy is positioned to profit from the ongoing offshore explosion. Other Motley Fool CAPS players appear to agree with me, given the company's top five-star rating. See what others have to say, and make your own call, right here.