I am starting to go long on this stock now at $3.65Small...

I am starting to go long on this stock now at $3.65

Small position to start with to provide enough ammunition to dollar average downwards from this position.

Some facts to consider:
(a) low debt, very important with potential rough times ahead. But its much easier to cope with a down turn with low debt than with high debt. Chances of capital raising is very low, so any short sellers will have to buy back on market rather than get the easy option of covering through an equity raising.

(b) look back through the historical results of this company. Go back to a time before the commodity super cycle fully hit, say around 2003. Operating margins, net profit margins etc where around half of what they were in 2012. 2012 could be the PEAK of margins.

So lets bring those margins back to 2003 levels.
Using 2012 sales figures, we get a profit of somewhere around $25-$30 million dollars. Which is around EPS of $0.41-$0.5

With a contraction in the cycle, capital spending will reduce significantly, coupled with low debt, FWD will easily be able to pay a dividend of around 30c going forward.

(c) AU$. With the commodity supercycle winding down, the AU$ will drop accordingly. This will help to insulate commodity prices when translated into AU$

(d) we may get another year of turbulence as the industry adjusts to changing conditions. So my forecasts are once the industry settles down into a more 'normal' pattern.

(e) look over the long term historical figures. Management have been good custodians of this company. There has not been excessive stock dilution, gearing post GFC has been tightened (lucky), and the real secret for me, ROE & ROC have been consistantely good for the last 10years which shows management is on the ball.

Just some quick thoughts.