Stock to Sell #4 – McDermott International (MDR)
McDermott International (MDR) is an engineering, construction and procurement company that focuses on designing complex offshore oil and gas projects. It has been on our sell list since February 2012. Its execution has been weak and earnings have regularly declined.
On Aug. 5, MDR again reported weak earnings due to decreased activities in the Middle East and Asia-Pacific region. Losses totaled $0.63 cents a share versus an estimated profit of $0.03. Now a major lawsuit has been filed by some stockholders who allege that management withheld certain unfavorable financial information.
The stock has been in a bear channel since February 2013. The recent rally to close to $8 failed at the bearish resistance (red-dash) line and 50-day moving average (blue line). Sell MDR at the market.