FET

FET is a cheap, cash-generative oilfield-equipment cyclical whose operations are healing even as its end market softens. FY2025 revenue slipped 3.1% to $791M and the company is still net-unprofitable (-$9.66M, -$0.81 diluted EPS), but the loss narrowed dramatically from -$135M in FY2024, and operating income jumped 134.7% to $30.1M. The standout is cash: $70.4M of operating cash flow against just $6.01M of capex implies roughly $64M of free cash flow — a ~12% FCF yield on the $529M market cap. Management is deploying it well, cutting long-term debt 27.9% to $135M and buying back $34.6M of stock, which shrank the share count 8.9%. At 0.7x sales and ~7.5x operating cash flow, the valuation already prices in a lot of pessimism.

The offsets are real and keep this from being a buy. Gross profit fell 14.1% and gross margin sits at 27.7%, so the profit recovery is being driven partly by cost/D&A reduction (D&A down 37.2%) rather than pricing power. Net margin is still negative (-1.2%), ROE is -3.3%, and the balance sheet carries a deep -$844M accumulated deficit and 1.58x liabilities/equity — this is a business that has repeatedly lost money across the cycle (net losses in four of the last five years). Cash on hand is thin at $34.7M and fell 22.4%.