MIND

[dan_s]

Mitcham Industries (MIND) share price is up a bit since their 2nd quarter earnings release, which it should be. Mitcham's business is very seasonal and the 2nd quarter is always the low point for the year.
Here is my EPG forecast for the next two quarters:
Q3 = $0.07 EPG
Q4 = $0.14 EPG
FYE 1/31/2011 = $0.43 (Cash Flow per share estimated at $2.75)
FYE 1/31/2012 = $0.47

MIND is a very healthy and conservative company.

MIND is trading below book value which is ridiculous.
1. The Company is virtually debt free in that Current Assets exceed Total Liabilities.
2. The largest line item on their Balance Sheet is Lease Pool Equipment. The market value of the Lease Pool Equipment is more than double the book value. We know this because they buy the equipment new at a deep discount to retail since they buy in large orders. Then they depreciate it over 5-7 years when the equipment lasts much longer. Each time they sell used equipment the profit margin is 80% to 90%.

IMO the Fair Value for MIND is close to $14/share.

[dan_s]

ATPG and PDS are the only other Sweet 16 companies trading below book value. I can understand why ATPG is beaten down this far (lots of debt and the moritorium on offshore drilling) but I don't understand why MIND and PDS are so "unloved" by the Market.

Both have solid Balance Sheets and both will be profitable this year with higher earnings projected for next year.