Is Controversy Holding Back Wood Group Shares?

wood group shares

Founded by Sir Ian Wood in the early 1980s it is safe to say that Wood Group has grown out of their JW Holdings roots into a global powerhouse. They started life on the stock market in 2002 and after a slow rise to prominence could be considered a diamond in the rough from a stock perspective. However, the days of them being a good performer for their size are now well behind them. To say that Wood Group shares have been on a rollercoaster ride between 2012 and 2014 would be an understatement. Controversy has surrounded the company on more than one occasion. When looking at Wood Group shares, is it such controversies that are holding them back?

 

Wood Group may be a leading firm on the FTSE 250, but they are not one that has an infinite amount of space to operate in. They have been operating in Western Canada’s tar sands, one of the world’s most notoriously dense crude oil deposits. However, constant delays within their operations in the region have led to widespread controversy. The company has simply labelled their efforts in the region as subdued, by that really is putting it lightly. In August Wood Group shares dipped dramatically as uncertainty swirled around their poor performance in the area. Wood Group have been open in stating that their engineering division would turn things around, but you can argue that the controversy has already taken its toll on the price of Wood Group shares.

 

Wood Group has always had a penchant for getting involved with countries that don’t have a firm political footing. In some ways, this is now starting to haunt the company. Their involvement in Israel is now starting to ruffle feathers, more specifically those of pro-Palestine campaigners. Several of them chose to protest outside of the company’s Aberdeen headquarters and such protest didn’t go unnoticed. Several of such were even at the AGM having invested in the company in the months prior solely for such purpose, with the heated exchanges that took place there being widely reported in the media. The company has obviously openly defended their work in Israel, stating that there shouldn’t be any issue as there are no UK sanctions in place to stop companies doing business in Israel. Official legalities are one thing, but public perception is another, especially when it comes to Wood Group shares.

 

Rocky, wild, and unpredictable are three words that can aptly describe the performance of Wood Group shares. The company from a business standpoint has been a consistent performer, with the figures to back such up, but there have been problems elsewhere. The company seems to be unable to stay out of the news, with plenty of headlines detailing their controversial dealings reaching the public eye. As an investor in Wood Group shares, you must ask yourself if it is worth sticking by the company, with the very real possibility being that the almost inevitable next controversy could be one too many for Wood Group to withstand.

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About Author: Smart Traders

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