Gulf Marine Services Share Discussion Threads

[trident5] 22/8/2016 17:48

Jamiemp
their excellent margins provide a cushion to absorb some downside, the debt isn't repayable until 2021, and their profits are impacted by a quite hefty non-cash depreciation charge - with maintenance related capex very low.

You're quite right about the covenants and it looks a close call, but I think they're well placed to ride it out.

[jamiemp] 22/8/2016 14:17

I am both an experienced investor and someone who works in oil and gas.

The pricing is because they are a whisker away from breaching their covenants. They overextended themselves at the peak of the market.

So its a bet on management and whether they can control costs and their lenders to ride it out. Otherwise they will have to raise money by diluting the present share price.

I am long but conscious of the risk.

[cbirch1] 22/8/2016 14:00

I cannot understand this price, either. I currently work offshore on the windfarms in the North Sea and the demand is unbelievable. Also, if you go to a website called 4coffshore.com you can see there are loads of projects due to start in the UK in 2017 and obviously in my line of work I've heard a lot about these 'up and coming' projects too. I only got into value investing earlier this year and when I seen GMS in my shortlist, I was quite shocked.

On the flip side. The last 12 months I have noticed Siemens and other contractors for Siemens being a lot more frugal. Cutting hours and man hours where possible.

I hope this is some help to you more experienced investors. I personally think when oil gains momentum that's when the market will find confidence in this sector again.

Any feedback would be appreciated.

[sh1984] 17/8/2016 10:12

Still going down, may buy back in but around 31p

[dodge meister] 16/8/2016 12:47

There are 3 mid size vessels...only one is on contract and that was associated with a significant part of the forward order book.

[jamiemp] 16/8/2016 12:21

sure but that is still higher than yesterday's low. Besides, its now a penny stock with limited free float.

Unless people start haggling over a tenth of a penny, then any trade is going to cause a +/- 2-5% reaction.

[pictureframe] 16/8/2016 12:15

another contract terminated

[sh1984] 16/8/2016 12:14

Not to sure about that - It's already down 4% on today's opening price

[jamiemp] 16/8/2016 11:39

Although interesting that the price was immediately supported. Obviously some traders on the look out for buying opportunities.

I can't see any reason this would head back down prior to the results. Although I would be wary of being in too deep on the 31st - a mistake I have made before!

[sh1984] 16/8/2016 11:16

Losing contracts left, right and centre not helping!!

[jamiemp] 16/8/2016 10:29

Unless the market is right, we're wrong and it goes bust.

That being said, I am in again personally. As someone pointed out, you need to be in in advance of the news given the (lack of) liquidity. Hopefully the results end-August will contain some green shoots.

Offshore charter rates have been steadily upticking since June, so the recent renewals would not have been at the bottom of the market at least (one would hope).

[bikwik] 16/8/2016 10:23

Well I think the market has it wrong in that case. The time to buy is when the market pushes the shares of a fundamentally sound business to ridiculously low levels. This being a case in point. So here lies the opportunity.

[jamiemp] 16/8/2016 10:02

been buying and taking losses on these since 160p(!). I think they have a handle on the debt, and profits will turnaround at some point, but the market obviously does not care for them.

[bikwik] 16/8/2016 09:00

Seems to me these really want to go up. Up until just now all trades were sells, yet price up 2.7%. Quote of 37.00 to 37.50. Then first buy of the day at 37.50 and offer goes immediately up to 38.00.

[rhomboid] 15/8/2016 17:25

I bought in this morning as straight swap for OCN , I wanted exposure to the bounce back in oil support services as and when it comes and given recent news flow I can see this doing very well indeed on 2 year timeframe.

[johnsoho] 15/8/2016 17:18

Added a few more today, hopefully the share price recovery will continue.

[richtea1701] 15/8/2016 17:16

This is a good business that the market has massacred. I'm in quite heavy at 32/36p.

[hpcg] 15/8/2016 15:53

I agree, the set up looks very nice. I bought during the big up day in June and that did not work, so I'm cautious on definitively calling the bottom. We do need to see activity increase. All the cost saving oil companies have been doing is at the expense of service companies, either directly through lower rates, or indirectly through lack of activity.

[bikwik] 15/8/2016 15:36

Description of Harami's if you don't know:

[bikwik] 15/8/2016 15:33

Chart looks pretty nice to me:


free stock charts from uk.advfn.com

[hpcg] 15/8/2016 15:29

Well I'm in, though this is my second attempt. Oil services lag oil companies by a lot, and the drillers continue (Ocean Rig latest) forecasting hell, though largely because of their enormous structural over supply.

[bikwik] 15/8/2016 15:17

Compound growth in revenue of 23% per annum between 2011 and 2015. This year will no doubt be down a bit because of the past fall in the oil price. However, oil is recovering and has further to go, so GMS revenue should pick up next year. Meantime its dirt cheap and overlooked by most. Obviously not by me and Richtea for example.

First chart resistance is at 43p (when at that level the forward P/E is 3.8). So say it got to a P/E of 5, then share price would be 56p. So' i'd have thought it not unreasonable to see these at 50p within two weeks.

Just letting you know. DYOR etc.

[dodge meister] 15/8/2016 15:10

Chart is nice?? The chart needs to break the near year long down trend...the company though does look good.

[bikwik] 15/8/2016 15:01

This is running ahead of the figures due on 31st August. Even allowing for companies f/c of a 25% to 30% drop in EPS, the P/E is just 3.3. NAV of £285m (current mkt cap of £131m) so its trading at less than half of book.
Graham Ratio is 0.23....i.e dirt cheap. Pre tax margins of between 35% and 40% from 2012 to 2015. Debt is high but is easily being serviced.

Yields about 1.5%, but dividend cover is very high at nine times!! Obviously they could easily raise the dividend, though they may not do just yet. Plus its a great business. Check it out for yourselve. Plus the chart is very nice.