Tuesday, June 30, 2015

Seeking Alpha: Tidewater Hoping To Weather The Downturn

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.

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Tidewater Hoping To Weather The Downturn

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