Adding heavily to McDermott (MDR) and Foster Wheeler (FWLT)

Well the market continues to offer interesting gifts. The market seems indifferent to the strong results of the global infrastructure group, with Fluor (FLR) and McDermott flat, and Foster Wheeler down.

The headline in the FWLT report is a miss due to a large 1x charge related to a power project. In fact AP has headline "Foster Wheeler Q2 Profit Plunges" ooooOoo scary!

Backing out this reserve and FWLT reported $1.41 vs $1.33 analyst expectation. Revenue increased 50% year over year in the quarter. It is perhaps likely the 'beat' was not enough. That the 1x charge was an 'unhappy surprise' but it doesn't change the underlying strength in the revenue numbers and industry growth. FWLT could certainly see downside to perhaps $90 on this, but currently trades at the cheapest valuation of the peer group based on projected 07/08 earnings (which I believe are sorely understated)

I have added to my initial positions in both FWLT and MDR today on the general weakness.
MDR is up to 4.25% of the fund's holdings @ $43.5K
FWLT is up to 3.9% of the fund's holdings @ $40.0K

I will continue to add these or others in the group on weakness in their stock prices.

Long FWLT, MDR