BetterTrades looks at FMC Technologies Inc.

FMC Technologies (FTI) announced this week that it has been awarded the Dallas / Fort Worth International Airport (DFW) Excellence in Diversity CEO Award for 2007. This award recognizes a prime contractor that exemplifies an outstanding commitment to DFW's diversity programs and innovative programs to promote inclusiveness. FMC Technologies provides maintenance and management services to DFW International Airport. Earlier this year, the DFW Airport Board awarded FMC a three-year, $38M contract for comprehensive terminal management services.

FTI, engages in the design, manufacture, and servicing of systems and products for the energy, food processing, and air transportation industries. It operates in four segments: Energy Production Systems, Energy Processing Systems, FoodTech, and Airport Systems. The company was founded in 2000 and is based in Houston, Texas, and currently employs over 11,000 people.

If you are able to look at the company’s chart, you can see that over the past six months that FTI has had a fantastic run in the markets. Beginning in May, the stock was trading at the $35 mark. Through May and June, the stock was trading within a small channel of $5. It wasn’t until the start of July that FTI started taking off. During that month, the stock gained 23% in price to reach its highest level of the month at $48.25, before receding at the end of the month.

During the high volatility of the markets during August, FTI felt the effects of the markets as it traded as high as $47 and as low as $40. The turning point for the company came in late August, when FTI and Island Offshore Management signed a $25M contract stipulating that FTI supply offshore drilling components that will be used by BP Petroleum Co. At this time, FTI was trading at $44 a share. Upon word of this news, the stock rose $2 that day. The other news that propelled the stock upwards was that of a five-year contract with Statoil, signed last week, to provide sub-sea equipment and services for the North Sea and other international projects. The total for the contract was in the range of $2.6B to $4.4B.

Since the signing of these very lucrative deals, FTI’s stock price has risen 34%, from $44 a share to just above $58, which marked its new 52-week high of $58.62. Also included during this time, was FTI’s stock split 2:1 on Sept. 4th, while the stock was trading at $95.53. In addition to new contracts, the company mainly relies on their strong financial standing along with a stellar business model. FTI continues to benefit from outstanding Revenues, $4.15B, and from the ability to grow their Quarterly Earnings, +11.1%, and their Quarterly Revenue, +21.4%, year-over-year. Even though the company has exceeded their 1-year target price of $54.78, the stock still has the potential to continue upwards, well through the $60 mark. Especially with the way that analysts are concerned about the future of oil prices.


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