Louis d’Arvieu of Amiral Gestion presented his in-depth investment thesis on John Wood Group (UK: WG) at European Investing Summit 2018.

Thesis Summary:

John Wood Group is a leading global engineering company in oil and gas (upstream and downstream) and industrial capex, from design and construction to operation and maintenance. Thanks to an asset-light and mostly de-risked model plus strong acquisition know-how, the company has been able to grow EPS at an annual compounding rate of ~10% across cycles. Management has an impeccable execution track record and good incentives linked to total shareholder returns, profits, as well as cash and safety. Based on Louis’ estimates, the shares recently traded at a recurring 10% FCF yield, with 5+% sustainable organic growth and a 3.5% dividend yield. The shares are cheap because the market appears to doubt they the company will succeed in integrating its most recent acquisition, Amec Foster Wheeler.

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About the instructor:

Louis d’Arvieu joined Amiral Gestion in 2005 and serves as a fund manager for the Sextant funds. Founded by Franois Badelon, Amiral is an independent asset management firm based in Paris. Amiral’s single goal is sustained performance with minimum risk based on the firm’s fundamental investing approach. Louis graduated from the HEC School of Management in Paris.