The Razor's Edge

2-Year Price History

A Word Of Caution

Willbros Group, Inc. (WG) has experienced a very significant loss in market value recently. Clearly this drop in price will have an impact on the valuation but the recent events that caused the drop may have not been fully factored into our analysis yet. When a stock loses value very quickly it could be a sign that there is a fear of bankruptcy.

Of course, you may proceed to review our research report for this security, but please be aware that our model may not reflect significant factors surrounding this company.

Therefore, (and as always), check additional sources and available information regarding WG before making an investment decision.

Ockham's Rating

Rating Specific Information Withheld Premium Access Only

WG Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, WG the high and low end of the Price to Sales per share ratios are 1.17x and 0.41x respectively.

Notice that WG's current Price to Sales per share ratio is 0.15x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $8.27, WG is 82% below where we would expect to see it. This will beneficially factor into our final analysis of WG as it is not often that this stock sinks to these levels.

WG Cash Earnings

Cash (and the ability of a company to generate it) is a pivotal analysis at Ockham Research. With WG, we have found that we don't have as many years of positive Cash Earnings as we would like in order to run an analysis. When a company like WG has had several years of negative Cash Earnings mixed in with their positive years, it can be difficult to really get a good analysis of their potential. At Ockham, we always advise that Cash is key to any investment, so investors should consider the lack of positive years available as a signal that other types of analysis may need to be more heavily relied upon in WG's case.

WG Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure on a company's inherent expectations. As far as our investing methodology goes, it is not necessary to pay a dividend in order to get a favorable rating, so as for right now WG gets a neutral rating for the dividend portion of the model. The company is not currently paying a dividend nor have they in the fairly recent past.