Entering text into the input field will update the search result below

Mitcham Industries Takes Off

Jun. 02, 2020 12:31 PM ETMIND Technology, Inc. (MIND)MINDP6 Comments


  • The company is in the midst of a strategic reorientation away from their traditional lease business and towards their more promising marine technology products.
  • Some benefits are already visible in the form of good growth in their marine technology business and rising gross margins.
  • The Q4 results were depressed by one-off factors.

Mitcham Industries (NASDAQ:MIND) is undergoing an interesting transformation, refocusing their business away from their equipment leasing segment towards their marine technologies segment with their Klein (acquired at the end of 2015) and Seamap businesses.

Our investment thesis is that despite worsening results (until recently) investors are not sufficiently appreciative of the opportunity this transformation offers although in the last couple of days that suddenly changed quite a bit.

At first sight, that transition is not going too well for shareholders, but when we started researching and writing, the shares suddenly doubled, although they have given back a bit since. We think investors realize the company isn't going out of business, as they seemed to have feared:

The performance the past 5 years isn't terribly promising but at least there has been a considerable improvement in net income:

Basically their equipment leasing, which used to be their prime focus, is slowly liquidating by selling off equipment and replacing it with less new equipment. The company spelled out the reasons for the strategic reorientation in the 10-K:

over the past several years there have been a number of developments that have had an adverse effect on that business. These developments include the following:

  • uncertainty in prices for oil and natural gas and the resulting decline in exploration activity by oil and gas companies;
  • an excess of rental equipment or equipment capacity in the seismic industry;
  • increased competition for the sale or rental of seismic equipment, particularly land seismic equipment;
  • decreased pricing for the purchase or rental of seismic equipment; and
  • financial difficulties encountered by many of our customers in the seismic industry.


Company facilities in Malaysia and Singapore suffered temporary closures, giving management limited access to receive and make shipments, but this has now opened up.


This article was written by

Shareholders Unite profile picture

Shareholders Unite is a retired academic with 30+ years of experience in the financial markets. He looks to find small companies with multi-bagger potential while mitigating risks through a portfolio approach.

He runs SHU Growth Portfolio where he offers wide coverage of several small companies with high growth possibilities. He has a buy and hold approach with tranche purchases of stocks of interest. The service features an illustrative portfolio to incorporate into your portfolio, buy alerts, weekend stock and market updates, and a chat room. Learn more

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (6)

QQkazzoo profile picture
Thank you for this article! So what attracted me to this company was this MA-X technology. Could you comment more on this? How can this affect this company? Is this the only type of this kind of technology that can close the nadir gap? If the Navy wants it what kind of money could this bring into this company?
I've been in the preferred for a couple years now and bought more and some common as well after listening to the last quarterly call (I think it was me and 2 analysts...). I liked what I heard about strategic changes in the business, the guys struck me as intelligent and straightforward and I think they were very transparent and realistic about the negative impact of the revenue deferral mentioned in this article. It just seems like a well-run company with enough cash reserves to make the transition from primarily drilling-oriented services and even though I'm up 80% on the common shares, I'm not selling. I consider this a long-term hold. And yes, the preferred is cumulative. My 2018 preferred divvys were qualified so taxed at the LTCG rate and 2019 was apparently ROC since it was reported on my 1099-div as non-dividend distribution so it's been great in my taxable account. It's redeemable June 2021 but I hope they don't!
Shareholders Unite profile picture
Thanks for the added color, uncorrelated.
Gino Verza profile picture
Shareholders Unite.
Another great article in the less-traveled road. Love to read them. Thank you.
I am unfamiliar with the name. Based only on a cursory look, my concern is that the unwinding of volatile and potentially credit-impaired lease assets negates/constraints the opportunity in the marine business. As I recall from my experience in wholesale lease financing unwinding impaired/volatile lease assets is a long, laborious and expensive process. Thank you again.
Shareholders Unite profile picture
Thanks Gino, appreciated. As far as I know, the assets they have to lease have been fully written down, so that risk seems to be limited..
bambi1 profile picture
Certainly they could suspend the preferred share dividends if they wanted to ( and I believe they are cumulative) but preferred dividends can’t be cut.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.