Q: Would you provide an update on your thoughts on FEC.
5i Research Answer:
The energy sector continues to see weak sentiment somewhat, and services even more so. FEC is down 25% YTD and 16% over one year. It is cheap at 11X earnings, with a 3.88% dividend. The balance sheet is fine, but earnings have declined over the past couple of years. It has no current analyst coverage so it does not get much attention. Insiders own 2%, Catalyst Capital owns 41% and some will see that ownership as an overhang on the stock (if they decide to sell). The dividend payout ratio is extremely low and we would not be concerned there. But we would like to see revenue and earnings growth improve, certainly. So today we would not find it too compelling.