Halter Marine/HLX - huge upside ''IF" management can perform ...
Good & Bad news with HLX. First the good news (actually ''great'' news imho) : they nearly doubled revenue.
<< For the nine months ended Dec. 31, 1998, the company reported net income of $11.8 million, or $0.41 per share, diluted, on revenue of $759.8 million. For the comparable 1997 period Halter Marine Group reported net income of $22.0 million, or $0.76 per share, diluted, on revenue of $480.8 million.>>
...now the bad news; they made 1/2 the profit on nearly double the revenue; ie: $11.8 Million vs. $22 Million. Must have been some Texas Sized cost over runs there..... Management is in the ''hot seat'' here. Compare FGI's margins and earnings and the ''management'' report card difference is pretty glaring !
''If'' - HLX; can execute, control costs, maintain margins and sustain growth anywhere near this level; then this company is very, very, very cheap and is a compelling buy - perhaps one of the best values in the entire oilpatch. "If'' they do not; this is just a very, very large leaky 'ole tanker taking on water...
The questions remain unanswered; can HLX's management get these over-runs under control, have they lost credibility in the market place, do they have the talent to execute and can they still grow revenues in this enviroment ?
.17 x sales and .80 of book value looks very, very tempting... or does it ? This appears to be a ''management'' play here, imho. Are you listening Mr. Dane ? - because 'ole J.L. & Friede Goldman are about to eat your Rig business for lunch... |
