OMNI Energy Services: An Undervalued Gem

 |  Includes: OIH, OMNI
by: Allen Chen

Based on recent news, it seems that OMNI Energy Services Corp. (OMNI) should report 40 million revenue, vs its 26 million revenue estimate:

"For calendar 2006, CHI's annualized revenues approached $30 million and Pro Forma EBITDA exceeded $5 million. On a pro forma combined basis, OMNI said its fiscal 2006 revenues, including the acquisitions of CHI, Preheat, Inc. and Rig Tools, Inc. for the entire twelve month period, exceeded $140 million."

After simple subtraction, it would appear that OMNI should have revenue of 140 - 30 = 110 million for FY06.

Now, let's look at analyst's estimates: OMNI's original estimate for Q4'06 and FY 2006 are 26 million (Q4'06) and 96 million (estimated) for Q4'2006. This is a blow out for its Q4 report, which should be issued around Feb 11-14 (based on the fact that OMNI reported in the Aug 10s and Nov 10s for the last two quarters).

No wonder OMNI issued the news about it's strong backlog when it dropped below $8. What's more, on Tues, Jan 20th, OMNI's backlog increased to 75 million, about 2 quarter's work.

OMNI should make $1.1+ in 2006, with a trailing P/E around 8. It is by far an undervalued gem.

OMNI 1-yr chart
OMNI 1-yr chart

Disclosure: Author is long OIH and OMNI.