Value Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Paul Senior who wrote (33888)	3/20/2009 11:23:15 AM
From: E_K_S	1 Recommendation Read Replies (2) of 78730

Hi Paul Re: HLX The share price is selling off its recent highs around $30/share but I noticed that there were several different long term debt facilities created recently which they have been using to finance their development projects. A large portion of their secured and unsecured notes were placed when their project valuations were priced much higher. They appear to have sufficient future cash flows to service and pay off this debt as long as Oil & Gas rates remain in the $60/bbl and $6/cpm range. At least that was where the rates were when they obtain the financing. A more recent private placement was made using a convertible preferred series (issued when the common was selling around $15/share). The private placement party has subsequently converted all of their preferred into newly issued common shares early this year. ( marketwatch.com{743DB0FF-572D-4901-8072-BFB4F0DB7FE0} ) That's a positive to me as the current stock price seems to have discounted the common share dilution. The company also split their shares 2 for 1 on 12/31/2005 (at that time the share price was around $30/share post split). Helix Energy Solutions Group In (NYSE: HLX) is selling at 40% of BV and the analysts estimates for next year are between $1.00/share - $1.33/share down from $2.50/share only 60 days ago. That makes their forward PE around 5 (seems low when compared to other companies in the same sector like Oceaneering International, Inc. (NYSE: OII) at 10 PE). I like their book of business and the company's specific service niche (deep water oil & gas services). The stock has broken out above its 50 DMA ($5.00/share) this week but on average to lower volume (not very good). I have it on my watch list and might start an exploratory position if there is a check back below $5.00/share. The options market are paying $1.25 for January 2010 $7.50 calls, so there are expectations that at the current price the stock is 60% undervalued. I believe that if Oil & NG prices stay at current levels (or higher), HLX could trade back to $10.00/share which is the next volume accumulation level. The stock sold down from $30/share to $10/share in October 2007 when the price of oil dropped off a cliff. I am encouraged that the insiders are buying at current levels too. Acergy SA (ACGY) ( finance.yahoo.com ) which you mentioned earlier this month as another company in the same sector is up over 40%. I like this one too but am not able to buy a foreign stock very easily through Schwab. EKS

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next