MIND
MIND
Mitcham Industries (MIND), one of our Small-Cap Growth Portfolio companies, reported fiscal Q1 results that beat my forecast. Plus, their outlook for Q2 looks good. I will update the model tonight and have more on this one.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: MIND
My preliminary update of their Net Income & Cash Flow Forecast model has been posted under the Watch List Tab. I will adjust it again after I listen to tomorrow's conference call.
MIND has the cleanest Balance Sheet you can imagine for a public company. Current Assets are more than 6X Total Liabilities. In fact, cash is more than Total Liabilities. They will be using the cash to buy back stock.
Historically, Q2 has been the weakest quarter of the year because they lease a lot of equipment in Canada and Russia. "Spring Break-Up" shuts down seismic work in both countries for a couple month. It is hard to shot seismic in the mud. However, South American business is picking up, so that should help level out earnings this year. Also, they have a couple big Seamap equipment sales that will be booked in Q2.
First Call EPS forecast for this fiscal year is $1.40 and that looks about right to me. If so, CFPS should be around $3.75. IMHO a company with no debt that generates strong cash flows should trade for at least 6X CFPS.
Listen to the conference call tomorrow. Billy Mitcham is a great guy and a straight shooter.
MIND has the cleanest Balance Sheet you can imagine for a public company. Current Assets are more than 6X Total Liabilities. In fact, cash is more than Total Liabilities. They will be using the cash to buy back stock.
Historically, Q2 has been the weakest quarter of the year because they lease a lot of equipment in Canada and Russia. "Spring Break-Up" shuts down seismic work in both countries for a couple month. It is hard to shot seismic in the mud. However, South American business is picking up, so that should help level out earnings this year. Also, they have a couple big Seamap equipment sales that will be booked in Q2.
First Call EPS forecast for this fiscal year is $1.40 and that looks about right to me. If so, CFPS should be around $3.75. IMHO a company with no debt that generates strong cash flows should trade for at least 6X CFPS.
Listen to the conference call tomorrow. Billy Mitcham is a great guy and a straight shooter.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: MIND
I listened to a replay of their conference call and made some minor adjustments to my forecast model. This is shaping up to be a very good year for MIND.
> Seamap sales are going to be strong for the next three quarters.
> 90% of MIND's revenues now come from outside the U.S.
> Leasing revenues are picking up in Latin America and in Europe. Q3 & Q4 revenues should be very strong.
> MIND will generate over $30 million in free cash flow this year and they intend to buyback a million shares of common stock.
Q2 is the low point for the year but I am forecasting approximately $0.10 EPS and $0.67 CFPS. Earnings and cash flows should ramp up sharply in Q3 and Q4.
EPG members can find the forecast model under the Watch List Tab.
> Seamap sales are going to be strong for the next three quarters.
> 90% of MIND's revenues now come from outside the U.S.
> Leasing revenues are picking up in Latin America and in Europe. Q3 & Q4 revenues should be very strong.
> MIND will generate over $30 million in free cash flow this year and they intend to buyback a million shares of common stock.
Q2 is the low point for the year but I am forecasting approximately $0.10 EPS and $0.67 CFPS. Earnings and cash flows should ramp up sharply in Q3 and Q4.
EPG members can find the forecast model under the Watch List Tab.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group