GulfMark Offshore, Inc. (NYSE:GLF)

oil rigs, americas

Could profit from expansion in off-shore-exploration; however I have no great hopes for the short-term. Might be a seller to re-buy later

Outperform!!

Gulfmark shares are up from $32 to about $50 since it bottomed in July. The 2 yr performance has been steadily over the S & P yield with consistent positive trending. Management recently commissioned construction of 6 new vessels, indicating their confidence in future growth.

Youngest fleet. Prices will be up this winter, and China needs more gas each day.

Small cap; energy.

Motley Fool recommendation---testing it.

Here's the buy rec:

http://www.fool.com/investing/general/2011/01/04/rising-star-buy-gulfmark-offshore.aspx

This is the time to get in...oil and natty gas supplies are high and people are sour on drilling in the Gulf at all. That will fade eventually and oil and natural gas will pop. GLF helps make it all happen and is trading well below historical tangible book levels. Solid management makes this one you can hang on to for a while.

reloading

Over-reaction results in big gains, as the need for oil will not dwindle any time soon given China and India, etc. Now is a good time to get in...

I want some exposure to oil services companies other than Transocean.

P/B under 1 , ROE HX and 5 year chart, Low Debt/ Equity. Administration opening up offshore development.

Good growth and earnings.

Bad news:
" For the nine months ended September 30, 2009, we had net income of $61.8 million, or $2.44 per diluted share, on revenues of $304.2 million. During the same period in 2008, net income was $124.5 million, or $5.19 per diluted share, on revenues of $289.9 million... Operating income decreased by $73.3 million, from $133.6 million in 2008 to $60.3 million this year. The decrease is due largely to the $46.2 million impairment charge resulting from a shipyard defaulting on the construction of three vessels. Also contributing to the decrease was an increase in operating cost related to the increase in vessel count and a smaller gain on sale of assets of $13.3 million... In late February 2009, one of our vessels in Southeast Asia, the Sea Searcher, was damaged in a ship fire. The company’s insurance underwriters deemed the vessel a constructive total loss and a gain on the involuntary conversion of approximately $1.4 million was recognized in the first quarter related to this event. In March 2009, we notified a shipyard building three of the vessels in our new build program that they were in default under the construction contract. Construction on these vessels has stopped and in April 2009, we concluded that we had a material impairment and recognized a charge of $46.2 million in the first quarter of 2009. " Good: I like the company's performance for the last 10 years.

low PE, nice cash flow... But mostly a speculation that there will be a major need for these services as oil and nat gas become harder to find and extract, before all the lights go out.

GLF

I'm not an expert on upstream oil and gas, but I can't see the prices of petrol decreasing in the medium term (at least not before green technology becomes mainstream). That probably means various rigs will still be in operation in the future, and they will need the services that GulfMark provides. Looking at valuation, GLF is selling at slightly below tangible book, and still makes operational profits. The only uncertainty is the amount of debt they have contracted through the Rigdon acquisition, but they just recently refinanced the portion that was coming due in 2010, so assuming their business doesn't decline to pre-2006 levels, GulfMark should perform well.

Not only does it have a low PEG (0.36) and a low P/E (5.13) and P/B (0.81) for its industry, it's been able to boost its sales phenomenally despite the economy. Great profit margins, great ROA, above-average ROE.