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McDermott International - Significant Cash Burn Is Manageable

There have been many articles written lately on the excellent value offered by McDermott International (MDR) at its present share price. Anyone who is interested in reading more on the value offered should check out some of Hawkinvests articles on the stock, which offer an excellent summary of the long case for MDR Shares.

It was these articles which initially started my interest in the company, and I agree with the author that the shares offer excellent value at their current $2.63 price. However, one aspect which I believe investors may be interested in but which hasn't received a huge amount of coverage is the cash burn rate of the company. This is a significant factor to be considered going forward and should be watched closely by investors.

Firstly, McDermott's business is extremely capital intensive; the costs of their property and equipment purchases are normally around the $280m mark per… Read More …