The reality is that WOR's share price is inextricably entwined...

The reality is that WOR's share price is inextricably entwined with the price of oil which continues to be under pressure on over-supply concerns and global equities sell off. Just having a look at the futures as I type this and it ain't looking pretty at all..

In addition, the well documented technical issues as a result of the sub-underwriter overhang also looms.

But just taking a step back and analysing the equity raise, it was comforting to see the insiders loading up with the Chairman stumping up $100M of his personal cash to take up the offer along with Dar Group who pitched in about another $800M worth. Even Jacob's elected to take part of the sale as script.

The reported Q4 result for Jacob's during November indicated that the business unit WOR purchased grew earnings at circa 30% during the quarter.. which is a fantastic result.

Everyone is anticipating this increased capex across the industry as activity levels increase, and while WOR is exposed to oil and gas capital expenditure and not the oil price directly, this volatility to the downside in POO is taking toll on the share price and quite honestly makes for very hard viewing. But WOR's management is truly first class with a focus on controlling overhead costs and maintaining high utilisation should drive earnings above consensus expectations... This deal makes excellent strategic sense, but unfortunately has fallen victim to the downside pressure in POO and a broad based market sell off. Fundamentally, the stock is probably as cheap as it's ever been with say FY 20 EPS estimate between 95 to 110 cents, taking mid-point of 105 cents means it currently trades on a forward P/E of about 10.5 which is quite frankly ridiculous.

It's only a matter of time for value to come through and push this up, but it will be choppy if POO continues to be volatile. But for those who have done their research and DD and have a time frame of more than 2 months when assessing this investment, the current price point represents an absolute steal!... and I was ecstatic to get a hold of this at $13 a couple of weeks ago...lol

Anyway, all IMO