ION Geophysical Corporation (IO)

Strong Move Up Likely on Volatile Stock

had its run, no support, PE

With the partnership announced today with BPH and the new price target of 8. This stock needs another look.

As the limited natural resource of oil becomes harder to pull, locating substantial reserves is most important. Ion Geophysical is on the leading edge of this technology. They have recently expanded their business and have exposure to the Asian market. While reading the most recent conference call, I like some of managements decisions concerning debt repayment and R & D.

I own this stock. I like the stocks potential for a rise in price within 3-5 yrs.

ION Geophysical is severely undervalued by the market right now. Excellent competition for DWSN. Increasing scarcity and increasing oil and gas prices when the market rebounds certainly won't lead to a slowdown in demand for ION's services.

The capabilities provided by IO are precisely what oil & gas companies need to increase their hydrocarbon reserves and production.

Highly undervalued as of today.

This 5-star CAPS was $14-16 a year ago, great earnings estimates & MUCH Motley Fool attention of course: I bought some!

IO is DWSN's major US competitor. Both companies provide crucial seismic imaging data to E&D energy producers. You can't do E&D without this sort of information. It's a specialized, niche field whose chief human resources and assets can't be replaced over night by a competitor. I predict a wide-moat long term opportunity. I established a real position here at about $2.60/share.

While ION Geophysical has been around for a while, it is just in the last 4 or 5 years that they have started to grow. In 2004 they added Concept Systems and GXT, and in 2008 they added ARAM.

They are a developer of technology and equipment for Seismic Contractors, and Seismic Data Libraries for the E & P sector.

With the economic downturn, and the subsequent reduction of exploration budgets, they have experienced a downturn in their business just at a time when they were poised to experience significant growth.

Their primary competitor is CGG Veritas, a French company about 10 times their size (asset wise). While ION has a tangible net worth of only about 100M as of June 30, 2009, this is with an asset value of a little less then 800M. Veritas, at the end of 2008 had a similar tangible net worth of about 100M, but on an asset base of almost 8B.

Ion moved their short term debt of about 200M to long term. This debt was primarily for the acquisition of ARAM.

They provide systems for both land and sea seismic data, and have been significantly expanding their global library of data.

The product which interests me the most is their "Firefly" cable less land system. The new advanced system was just put into use in mid 2008, and they sold their first system in early 2009.

They showed a large (non-recurring) loss in 2008, which gave them a loss for the year. For the first two quarter of 2009, they showed losses of about 38M and 11M. The 38M was also due mostly to non-recurring costs.

They have a good management team, and good products and services, and are positioned to experience significant grow in both sales and revenues when the economy resumes a more normal position in expenditures in exploration budgets by the E&P companies, and the Seismic Contractors are able to get credit to acquire their equipment.

This company has the potential to return 400% to 500% over the longer term.

Do your own DD, but I believe it is a winner.

JMO and worth exactly what I am charging for it.

Awake Giant...Awake!!!

I see a safer and more cost effective way to find minerals, oil, natural gas, and to map terraine for solar farms and wind power farms. And the state of California could benefit from it besides the cities who live next to a volcano, the ocean, and the military from anything I probably have not though of but are secretly using it.

Low PE, near 52 week low

insider buying

go long my friends...sounds like a undervalued stock with a nice product

X marks the spot

I got out of this not long ago because the market started heading south taking most equities with it, but it's down 50% from where I sold.

I like the stock, but why not get out if your starting to get pounded by the market when you can get back in after the drop.

Because this company is undervalued and provides a service and a technology that will only grow in demand.