Willbros Group Inc. (NYSE: WG), trading around $9 per share, has neared its 52 week high mark in late day trading on news of a stock upgrade. As reported in the March 6th edition of the Wall Street Journal, the stock of the Houston, Texas based engineering and construction company, was cited as a hot stock pick, along with the likes of VeriFone Systems Inc. (NYSE: PAY) and Staples, Inc. (NASDAQ: SPLS).
The company’s market capitalization is around $428 million and a change in its underperforming business lines resulted in a better than expected earnings report. The company released adjusted earnings per share of $0.11 versus analyst expectations of $0.07 for the previous year-end quarter and posted higher revenues. This positive news propelled the company nearly 25 percent above its previous close.
Tulsa, Oklahoma’s Matrix Service Co. (NASDAQ: MTRX), a provider of construction services in the oil and gas industry, has a similar story in terms of its financial strength and is liquid, with a quick ratio of 1.29 versus around 1 for Willbros Group. Management’s decision to turn around Willbros Group Inc.’s fortunes and make it more profitable has put it more in line with the performance of companies such as Matrix. Matrix Service Co. has a market capitalization of around $432 million, which is around that of Willbros Group Inc., and at a times earning or price to earnings ratio of around 26, the company appears to be trading at a healthy range, closing recently at around $17 per share. It should be noted that the company’s shares are 90 percent institutionally owned, versus 66 percent institutional ownership of Willbros Group.
North American Energy Partners Inc. (NYSE: NOA) of Calgary, Alberta, Canada, with a much lower market capitalization of around $160 million, appears to be undergoing the same performance issues that have caused Willbros Group Inc.’s stock to underperform prior to its recent surge. Shares of North American Energy Partners Inc. trade at around $4 per share and has a debt ratio and debt to equity ratio that is in the same range of Willbros. As of last quarter 2012 results for both Willbros Group Inc. and North American Energy Partners Inc., their respective debt ratios were 78 percent versus 81 percent and debt to equity ratios were 347 percent versus 423 percent.
Key management decisions and a focus on more productive, revenue generating business will continue to fuel Willbros Group Inc’s growth and fuel positive feedback from analysts.