Steel Partners Adds $2.5 Million To Babcock & Wilcox Enterprises Inc Stake

in INVESTING IDEAS by

A Babcock & Wilcox Enterprises Inc (NYSE: BW) insider added $2.5 million worth of shares on Monday. With the stock is down -63.9% over the last year, investors may want to take a closer look at the company.


Insider Buying: Babcock & Wilcox

Steel Partners Holdings, a 10% owner, bought 441,456 shares of Babcock & Wilcox Enterprises worth a total of $2.5 million on Monday, February 12th. That’s roughly 1.0% of the company’s total market capitalization.

Recent Babcock & Wilcox Enterprises, Inc. Insider Transactions
Insider Trading Relationship Date #Shares Value ($)
Steel Partners Holdings 10% Owner Feb 12 41,456 $244,425
Steel Partners Holdings 10% Owner Feb 09 300,000 $1,695,810
Steel Partners Holdings 10% Owner Feb 08 100,000 $560,080
TOTAL 441,456 $2,500,315

 


Babcock & Wilcox’s Stock Price and Valuation

The company’s shares last traded at $6.31 as of Monday, approximately 35.5% of its 52-week high. While the stock is near its low, could the recent insider transactions signal a promising road ahead for shareholders?

Finbox.io applies pre-built valuation models to calculate a fair value for a given stock and uses consensus Wall Street estimates for the forecast when available. The company’s average fair value of $7.52 implies 19.2% upside and is calculated from 3 separate analyses as shown in the table above.

Babcock & Wilcox Valuation Detail
Analysis Model Fair Value Upside (Downside)
10-yr DCF Growth Exit $7.75 22.9%
5-yr DCF Growth Exit $7.40 17.3%
Earnings Power Value $7.42 17.6%
Average $7.52 19.2%

 

While insider activity on its own is not necessarily a buy or sell signal, it may offer insight into how ownership and management feel about a company’s future prospects. One of the greatest investors of all time, Peter Lynch, was noted as saying that:

insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

However, keep in mind this is only one aspect of stock research and that there are other important items to consider. I recommend you continue to research Babcock & Wilcox to get a more comprehensive view of the company by looking at:

Valuation: how much upside do shares of Babcock & Wilcox have based on Wall Street’s consensus price target? Take a look at our analyst upside data explorer that compares the company’s upside relative to its peers.

Risk Metrics: what is Babcock & Wilcox’s cash ratio which is used to assess a company’s short-term liquidity. View the company’s cash ratio here.

Efficiency Metrics: is management becoming more or less efficient in creating value for the firm? Find out by analyzing the company’s return on invested capital ratio here.


Author: Matt Hogan

Expertise: Valuation, financial statement analysis

Matt Hogan is a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock.

His work is frequently published at InvestorPlaceBenzingaValueWalkAAIIBarron’sSeeking Alpha and investing.com.

Matt can be reached at matt@finbox.io.

As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.

Expertise: Valuation, financial statement analysis. Matt Hogan is also a co-founder of finbox.io. His expertise is in investment decision making. Prior to finbox.io, Matt worked for an investment banking group providing fairness opinions in connection to stock acquisitions. He spent much of his time building valuation models to help clients determine an asset’s fair value. He believes that these same valuation models should be used by all investors before buying or selling a stock. His work is frequently published at InvestorPlace, Benzinga, ValueWalk, AAII, Barron’s, Seeking Alpha and investing.com. Matt can be reached at matt@finbox.io or at +1 (516) 778-6257.

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