If a rising tide is suppose to lift all boats, an uncommonly weak
tide carries the risk of leaving some high and dry. That might be a
little melodramatic with respect to Tidewater (NYSE:TDW),
but I do believe this global leader in marine supply and support
vessels for the energy industry is looking at a multiyear period of lean
times.
Tidewater has spent a lot of time, energy, and money
modernizing its fleet, but utilization rates and dayrates are likely to
plunge over the next couple of years as rig counts dive and offshore
E&P companies flee the market. While I think Tidewater has the
financial wherewithal to make it through to the other side, I'm not as
keen on this company as a way to play this trough and the eventual
recovery. The shares do seem undervalued on the premise that this is a
company that can return to profitability eventually, and companies like
this can see earnings rebound sharply from the bottom, but this is most
likely a multiyear recovery story.
Continue here:
Tidewater Hoping To Weather The Downturn
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