A significant driver of top-line growth: Babcock & Wilcox Enterprises Inc. (BW)

Babcock & Wilcox Enterprises Inc. (NYSE: BW) stock fell -3.37% on Friday to $4.87 against a previous-day closing price of $5.04. With 1.53 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.52 million shares. During the session, the Specialty Industrial Machinery company that operates in wider Industrials sector, reached to the highest price of $5.0200 whereas the lowest price it dropped to was $4.8300. The 52-week range on BW shows that it touched its highest point at $8.41 and its lowest point at $3.89 during that stretch. It currently has a 1-year price target of $8.80. Beta for the stock currently stands at 1.95.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of BW was down-trending over the past week, with a drop of -1.22%, but this was down by -2.99% over a month. Three-month performance dropped to -23.67% while six-month performance fell -11.62%. The stock lost -41.33% in the past year, while it has lost -15.60% so far this year. A look at the trailing 12-month EPS for BW yields -0.50 with Next year EPS estimates of 0.15. For the next quarter, that number is 0.04. This implies an EPS growth rate of -264.10% for this year and 200.00% for next year. EPS is expected to grow by 6.99% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 63.70%.

Float and Shares Shorts:

At present, 88.78 million BW shares are outstanding with a float of 86.13 million shares on hand for trading. On Aug 30, 2023, short shares totaled 1.58 million, which was 1.77% higher than short shares on Jul 30, 2023. In addition to Mr. Kenneth M. Young as the firm’s CEO & Chairman, Mr. Louis Salamone Jr. serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 86.38% of BW’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 55.01% of BW, in contrast to 52.31% held by mutual funds. Shares owned by individuals account for 31.00%. As the largest shareholder in BW with 30.63% of the stake, B. Riley Capital Management LLC holds 27,288,639 shares worth 27,288,639. A second-largest stockholder of BW, Fidelity Management & Research Co, holds 10,431,201 shares, controlling over 11.71% of the firm’s shares. Neuberger Berman Investment Advis is the third largest shareholder in BW, holding 6,394,014 shares or 7.18% stake. With a 3.12% stake in BW, the Fidelity Tactical High Income Fun is the largest stakeholder. A total of 2,779,204 shares are owned by the mutual fund manager. The Fidelity Convertible Securities F, which owns about 2.88% of BW stock, is the second-largest Mutual Fund holder. It holds 2,564,610 shares valued at 13.46 million. Fidelity Advisor Multi Asset Inco holds 2.82% of the stake in BW, owning 2,515,323 shares worth 13.21 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, BW reported revenue of $221.02M and operating income of -$3.55M. The EBITDA in the recently reported quarter was $9.13M and diluted EPS was -$0.07.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BW since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With BW analysts setting a high price target of $13.00 and a low target of $5.00, the average target price over the next 12 months is $8.80. Based on these targets, BW could surge 166.94% to reach the target high and rise by 2.67% to reach the target low. Reaching the average price target will result in a growth of 80.7% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded BW stock several times over the past three months with 13 Buys and 15 Sells. In these transactions, 383,330 shares were bought while 115,076 shares were sold. The number of buy transactions has increased to 54 while that of sell transactions has risen to 15 over the past year. The total number of shares bought during that period was 1,354,839 while 115,076 shares were sold.

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