Tidewater Inc.: High Margins, Low Debt

One of the names I screened earlier this week has caught my eye: Tidewater Inc. (TDW). TDW provides supply vessels and marine support services to the offshore energy industry.

P/B: 2
P/S: 3.3
Cash Flow/Enterprise Value: 11.9%
Yield: .9%
Net Margin: 31.75%
ROE: 19%
PEG Ratio: .18

I have not been a huge energy investor during the last three years. That said, the biggest win in my portfolio is Holly Corp. (HOC), a small refiner and marketer. I bought that in mid-2004 and still hold it. A major refinery hasn't been built in the U.S. since 1976 and it takes decades for one to be approved, built and become profitable, so HOC is still a good bet despite its run.

TDW has little debt and healthy cash flow. Margins are among the highest in its industry, and debt levels are among the lowest. Insiders hold a touch over $25,000,000 of common stock and have sold nearly $40,000,000 worth since the beginning of 2007, at a weighted average price of $62.95 . TDW has several large competitors (Transocean (RIG), GlobalSantaFe Corporation (GSF), Nabors Industries (NBR) and ENSCO International (ESV)) in a business that require scale (boats, docks, repair and maintenance facilities, etc.). I'm not in any hurry to get long, but it's on my watchlist.

Disclosure: none

TDW 1-yr chart

Comments

[Josh Stern:]

When I screen for undervalued companies, the list fills up with energy names. Since I don't want to out guess the futures market on the near and intermediate prices of oil/gas, I'd like to find other undervalued stocks that are negatively correlated to energy prices. XJT (an undervalued air carrier) is one good candidate, but I'd like to buy more undervalued energy names if I could find more undervalued counterweights.

2007 Jun 11 08:01 AM

[macho1:]

What about TELOZ , any comment of this undervalued energy name . thanks jdh

2007 Jun 11 11:51 AM

[macho1:]

What about TELOZ , any comment of this undervalued energy name . thanks jdh

2007 Jun 11 11:51 AM

[ToddC:]

TELOZ is an offshore trust which, coincidentally, I owned for a short while as a spinoff of Magnum Hunter. TELOZ receives 25% of the royalties from a series of oil and gas properties located off Louisiana. Since it's not an operating company growth comes from changes in oil and gas prices or changes in output.

2007 Jun 12 04:35 PM