Upping my exploratory position in GulfMark a little.
"GulfMark Offshore, Inc., together with its subsidiaries, provides offshore marine services primarily to companies involved in offshore exploration and production of oil and natural gas. Its vessels provides various services that support the construction, positioning, and ongoing operation of offshore oil and natural gas drilling rigs and platforms." (From Yahoo)
I interpret and summarize the following p.r. from the company as:
some customer business --- not all--- is already contracted for in '09, and into '10 as well. Further, GLF can fund its big capital expenditures internally. I presume the nearly .5B in ltd (per Yahoo) that they have is manageable.
From gulfmark.com :
"While current market conditions are uncertain, we are confident in our ability to navigate this more challenging environment. GulfMark's financial position is solid and we remain focused on our long term strategy and the potential opportunities that unstable markets often provide. Our liquidity is stronger than it has ever been and our young, modern, technologically advanced fleet already has 65% contract cover for 2009."
From another p.r.
"Cash flow from operations totaled $205.2 million for the twelve months ended December 31, 2008, compared to $128.6 million for the same period in 2007. The company made significant investments in 2008, including $108.6 million in capital expenditures, primarily related to the new build program and $121.6 million related to the acquisition of Rigdon Marine. Estimated cash commitments for 2009 for the new build program are approximately $111.0 million and are expected to be funded from cash on hand and cash flow from operations."
It looks to me like GLF might be a survivor. In the past ten years they've been profitable every year. Returns --- net profit margins --- are now an astounding and unsustainable 44.6% (some one-time ship sales, I believe). Otoh, profit margins have been high also in past few years and sales have increased too. Although, back otoh, sales increases have come from acquisitions, and profit margins have dropped when the oil business cycle has been difficult. Although roe is over 20% now, in the past ten years (which might include the up and down cycle), roe has averaged 11 percent. Back again otoh, the company is trading below stated book value now.
While this stock doesn't meet my screen p/e criterion (forward p/e estimate of 4 is higher, not lower, than current p/e of 2.8), this stock fits my other model criteria. Also, I like the business: I am hoping and betting that off-shore servicing must and will continue, and that GulfMark will continue to get its share of profitable contracts.
I'll add more if stock will drop to lows on no adverse news.
si.advfn.com^GLF |
