Gordon Tam, CFA
CFA, value, www.top10invest.com, long only

Civeo: The Underlying Lodging Business Is Deteriorating

The recent spinoff of Civeo (NYSE:CVEO) from Oil States International (NYSE:OIS) might appear to be underappreciated. However, with further analysis, I find that the underlying lodging business of CVEO is in trouble. Although I admit that spin-offs are fertile mine to find undervalued stocks, the prospect of CVEO does not warrant any promising future. In this article, I will show that the decline in both the occupancy rate and the revenue per available room "RevPar" together with the weak outlook for the Metallurgical coal price and Canadian oil sands business illustrate the imminent threats to the lodging business of CVEO. Without a bright future, no matter how undervalued CVEO might look, the valuation of CVEO can...

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