Sunday 28 September 2014

Extra stock bought September 2014: Fugro

The first extra investment for September became Fugro. This is the first Dutch company to enter my portfolio which already that on its own I find good! Due to their strong connection to the oil and gas industry they are currently having more trouble than they would have liked to have. Trouble sometimes leads to new business opportunities and I hope that Fugro will start to do that to build a broader customer base that is not within the oil and gas industry.

With this investment I decided to do something that my uncle often talk about... "always take a look at if the company is hiring or firing people". If they hire then problems are often not large and systemic enough to be of a concern. If they fire then wait to buy them until they start to hire again.

Fugro is hiring people and I even got tempted to apply for one of the jobs just for fun.

I made the classical start and bought 45 shares for a total price of 1044.02 € including the fees which means that I paid 23.20 € per share.

If you want to find out more about Fugro then please see analysis of Fugro and if you want to take a look at my current Stock Portfolio then click on that link. The portfolio will however not be fully updated until the end of the month.


Anonymous said...

I hope you are aware of problems Fugro has with write offs(300 mil), substantialy lower margin then before, and gas and oil drilling outlook.. I also bought Fugro at 26.5, because I am pretty sure that in long term, those problems will be solved..They are obviosly healthy company. I can see price coming back to 40 in near future, and cannot reasonably expect it to fell more then 20, so in my opinion, risk is not too high. It is volatile stock nowadays, but that just proves me that marcet is wrong an overreacting.
I agree with you totaly.

Best regards,
Victor, Slovenia

Fredrik von Oberhausen said...

Hi Victor,

yeah, at the moment Fugro is having a tough time and I am sure that I bought also Fugro too early which I seem to end up doing with my contrarian strategy.

Still... just like you say I do believe that the future will be good for them and it should hopefully only be a matter of how long time it will take before they get a more fair valuation again.

Is your sale price around 40 € then or when do you want to sell?

Anonymous said...

I agree with you, we both both fugro too early, but there is no way to predict how low can it go when things go wrong. But I dont pay too much atention to it. Fugro was around 40 for years, and their revenues were growing all the time, earnings are dropping nevertheless, but when I look longer term, I just cannot see the reason why would possibly otherwise healthy and hi tech company go down, just beacuse we have bad oil and gass market nowadays. In my opinion,oil and gas exploration can only go up longer term, and there is no doubt about it.That's why I don't have exact target price, andd exact time frame, I am going to just wait and see, probably for at least few years..
Best regards

Fredrik von Oberhausen said...

Good! Wait and see we shall do!

If you remember then just give me a heads up when you sell. I will of course write an article when I sell it so hopefully you will find out that way.