Jul. 13 at 1:45 PM
$BW I like Babcock and Wilcox, I still own their prefs as I am waiting for them to be long term capital gains. A buyback is not AS bullish as people want it to be. BW is a super cash intensive business. For their valuation to make sense and for it to go up, the company has to get new contracts to build expensive capital projects which takes a lot of up front investment from BW. If they think a buyback is the best use of their cash, it implies these contracts might not be forthcoming. On the other hand, its impossible not to be wildly impressed by their trading capability, they sold
$200 M at the top and are buying back
$50 M of debt and up to
$50 M of equity at the bottom
