Sell: Weatherford International (WFT)
from Capitalist Times
Updated from Investment Digest 757, May 21, 2014
The past half-decade hasn’t been kind to Weatherford International (WFT). The company sought to win market share from its larger peers by bidding aggressively on large-scale international projects, but these projects failed to live up to expectations, saddling the firm with significant losses.
CEO Bernard Duroc-Danner’s already shaky credibility took another hit after a series of accounting issues required a lengthy audit and numerous restatements of past results. The oil-field services straggler continues to lose money, and CEO Bernard Duroc-Danner told analysts that breaking even in the fourth quarter might be “in the realm of the possible”—hardly a ringing endorsement.
Although we expect Weatherford International to survive the downturn, a return to its trough valuation in 2009 would imply 40 percent downside from the stock’s current price.
We’ve downgraded Weatherford International to a Sell as we look to reduce risk heading into a dicey period for crude-oil prices and energy stocks.
Peter Staas & Roger Conrad, Capitalist Times, www.capitalisttimes.com, 888-960-2759, August 19, 2015