Ann: Qatar Shell Awards EPCM Contract for Pearl GTL, page-63

In this post I've tried to look at WOR through the eye's of someone with a long position.

What we know:
a) WOR made a very small profit in FY16 and zero divs.
b) HUGE annual cost reductions of 200m and aiming for 300 - 350m in FY17. A massive achievement.
c) Reduced debt by 115m.
d) Outlook at FY and again at AGM in October very vague and (imo) bearish esp saying "we are yet to see any signs of recovery in trading conditions". ie. no indication of a lift in capex by clients.
e) Only 4 'significant' contracts this FY.

What to expect in HY17:
a) Benefits of cost cutting will be apparent but offset against reduced revenue. It could be 25% - 30% down on PCP.
b) Outlook statement to be less bearish and looking at 2H to be better than 1H.
c) no div and more effort to cut debt to below 1Billion.

When going short I felt the above scenario would be enough to reverse the massive surge in SP esp after AGM in late Oct. But opposite has happened and SP has exceeded $10 for many days this CY. As I've written about 50x I think Mr Mkt is way too optimistic but doesn't give a damn what i reckon.

Blackrock suddenly exited WOR in Sept at $7.11. Clearly they felt the risk was too high. Current SP is some 40% higher! If my estimate for FY17 of 50-55c eps in right then (at $10.00) PE is 19x.

Ask yrself... is 19x fair value considering the macro? Does current SP provide opportunity to exit WOR esp when no divs likely next week? Is WOR likely to surge again between HY and FY result?

Just some food for thought. Who knows how mkt will react? i've been wrong this past several months. I'll leave it here and will post my reaction to hy result on Monday.