MIND
Posted: Fri Sep 06, 2013 1:27 pm
Mitcham Industries reported disappointing Q2 results, but the company is still generating strong free cash flow and they have the flexibility to deal with slow periods in the industry. At the end of July they were sitting on over $57 million in working capital, which compares to a capital budget of approximately $20 million for this fiscal year. The company is debt free.
Seamap sales were better than my forecast and interest in their new BouyLink 4DX system is very high.
That said, Q3 is now expected to be weak and the 4th quarter looks just "OK".
I have updated my forecast model and posted it under the Watch List Tab. I have lowered my Fair Value Estimate $3.50/share to $17.75/share. [My Fair Value is just 6X CFPS, which is a very low multiple for a debt free company.]
NOTE: Crude oil prices are the primary driver behind exploration budgets. If oil prices remain elevated, I would expect to see more demand for high resolution seismic in 2014.
Seamap sales were better than my forecast and interest in their new BouyLink 4DX system is very high.
That said, Q3 is now expected to be weak and the 4th quarter looks just "OK".
I have updated my forecast model and posted it under the Watch List Tab. I have lowered my Fair Value Estimate $3.50/share to $17.75/share. [My Fair Value is just 6X CFPS, which is a very low multiple for a debt free company.]
NOTE: Crude oil prices are the primary driver behind exploration budgets. If oil prices remain elevated, I would expect to see more demand for high resolution seismic in 2014.