Going by its share price chart alone, it looks as though something has gone badly wrong at John Wood Group (WG.). But the climb then steep drop between February and May this year came as private equity giant Apollo Global Management announced a bid for the engineering and services company, before then dropping its approach.
Tip style
Growth
Risk rating
Medium
Timescale
Long Term
Bull points
- Amec Foster Wheeler troubles in the rear-view mirror
- Exposure to growth sectors
- Balance sheet in good shape
- Dividends forecast for next year
Bear points
- Exposed to cyclical industries in energy and mining
- Hefty workforce and fixed costs
It took a few attempts before Wood’s board even considered an offer. The last offer Apollo made was 240p a share, a £1.7bn valuation. Pre-Covid, Wood's shares traded comfortably above 400p, but the price did not get back to those levels even as the oil and gas sector, which the group serves as well as the renewable energy, chemicals and mining sectors, rebounded strongly when demand recovered.