3 years ago climate scientists from five universities determined that 30% of Bob Dylan’s 542 songs included references to weather (“Blowin’ in the Wind”, “Subterranean Homesick Blues”…). Dylan leads the pack of weather singers that includes the Beatles, Taylor Swift, Springsteen and the Beach Boys.
If you were to monitor the inbound calls at Spears & Associates in November 2018 you’d discover that about 30% are associated with people trying to figure out what is going on at Weatherford. WFT shares were trading at $24 in 2014, fell to $5 in 2016, and sit below 70 cents as we type this today. The entire company is valued at $700 million or less.
Here’s our estimate of Weatherford’s top line revenues (for companies it still owns):
Since the downturn, WFT has grown sales only 9% while Halliburton’s sales are up 50%. By the way, WFT’s growth is better than BHGE’s and only slightly less than Schlumberger’s.
But, $700M for a company with sales of $6 billion? Why so cheap? Debt, combined with lack of growth. Like we tell everybody, Weatherford was a good company with good people doing good work, but this good work is hard to sustain when debt covers everything like a soaking blanket.