Australian (ASX) Stock Market Forum

MRM - MMA Offshore

Jump to new
Re: Mermaid Marine

minhla said:
Mermaid Marine shares are sliding down, major share-holders are desserting.Any Reasons. Please respond?
Click to expand...

I believe you have it back-to-front.

Major shareholders BTT and WBC are deserting,
thereby causing selling pressure.

My guess, FWIW; their clients are running to cash,
ahead of an anticipated correction or downturn!
 
Re: Mermaid Marine

minhla said:
Mermaid Marine shares are sliding down, major share-holders are desserting.Any Reasons. Please respond?
Click to expand...

minhla, welcome to the forum. Each company has its own thread otherwise we will have comments about the one company all over the place.

The Mermaid Marine thread is over there

Cheers
Country Lad
 
The most interestingly valued stock on the ASX to me.

I don't know enough about the industry, but have been looking for their medium to long term strategy once LNG construction finishes up here.
 
On December 10th, 2014, Mermaid Marine Australia Limited changed its name to MMA Offshore Limited.
 
shouldaindex said:
The most interestingly valued stock on the ASX to me.
Click to expand...
I agree that there is a great difference in market pricing this stock when the last financial year report had their Net Tangible Assets per share at $1.95. Share price seven months later at 80 cents. A ~please explain the price action~ from ASX Compliance last week had a response that Operating Profit before tax for the past 6 months was in line with market expectations at $55 million. This information could have settled the sentiment but irrationality was still evident in pricing afterwards.

The last FY dividend of 12.5c f.f. is attractive at current price but may not be as high this year. Obviously MRM have been bundled into the mining/oil & gas services death list after coming off a high of $4.10 in 2013. The sharp decline in the price of oil and the ensuing announcements of lesser drilling commitments from the big oilers has exacerbated the markets negative perception of MRM. The acquisition of Jaya will contribute fully this year but the future for offshore oil/gas services is looking dim.


Interest : took a 5k position at 80 cents.
 
MRM has tested $1.90 support 4 times, crashing through on the 4th.
If you haven't heard of the "4th attempt breakout". check this site: http://bartrade.biz/trades/hvn.htm
It is equally powerful in a downward direction, and I've applied it to MRM's 2014 chart (using sem-log scaling too)

MRM 4thAtt 06-02-15.gif

In my experience, the drop will at least double the range from top to baseline (marked by 1...4)
The alert at the 200% line did fire, but MRM failed to follow through. Even at 323%, it failed to produce a HL-HH sequence.

The most recent Low, however, is now supported by a Bullish Divergence in the momentum (MACD) chart. I'm till waiting for the HL-HH sequence that would confirm a turn of trend' I will not be buying before I see that.
 
Not a funnymentalist but it doesn't take a tertiary education to see this company continues to be undervalued based on a Book Value of $2.00. I know the sector is facing headwinds with gas/oil projects moving to production, oil price down and the lesser need for specialist marine services, but is the market marking this company down accurately? I believe not but irrationality outstays the most ardent objector.


Interest : not holding.
 
Forecast not good with worse 2H of FY announced by MRM due to low crude oil price and consequent lower exploration and development.
 
$100 M contract win for Mermaid announced today. Would be fantastic to see this announcement turn the company around. Sellers stacked up on cue so a bit of gnawing before breaking higher in my opinion.

Interest - back in today .605

Chart of down channel.

Untitled.png
 
Share price reacted differently this time and dived back to where it bounced from. Overall market drop contributed somewhat and forced my exit today. Aggressive selling today.
 
Wysiwyg said:
Not a funnymentalist but it doesn't take a tertiary education to see this company continues to be undervalued based on a Book Value of $2.00. I know the sector is facing headwinds with gas/oil projects moving to production, oil price down and the lesser need for specialist marine services, but is the market marking this company down accurately? I believe not but irrationality outstays the most ardent objector.


Interest : not holding.
Click to expand...

Just visiting this thread and noticed you took a position at 80 cents and on this thread - not holding. With current price of MRM you must be chuckling for a great decision made :)
DNH
 
Wysiwyg said:
Share price reacted differently this time and dived back to where it bounced from. Overall market drop contributed somewhat and forced my exit today. Aggressive selling today.
Click to expand...

I just realised you are the only person who has been selling and buying on MRM :D
Have a nice weekend (probably morning of yours now)
 
Miner said:
I just realised you are the only person who has been selling and buying on MRM :D
Have a nice weekend (probably morning of yours now)
Click to expand...
Yes got drawn into the divvy trap at 80 cents and thought the low must be close but business is slow for MRM so I'm thinking it will one of those bottom bouncing stocks now. Better stocks around at the moment.

Any view of Madagascar? :)
 
Wysiwyg said:
Yes got drawn into the divvy trap at 80 cents and thought the low must be close but business is slow for MRM so I'm thinking it will one of those bottom bouncing stocks now. Better stocks around at the moment.

Any view of Madagascar? :)
Click to expand...

Well
I can not read Malagasy or understand. But no where found any details of the business for sale at Madagascar . so waiting to get more info from company.
 
A damning trading update today saw the share price slammed down. December/January a particularly difficult period "with a low level of visibility of demand for the second half of the financial year". To think they were valued at $4 but yet another company suffering low oil/gas exploration/construction. They also bought into Jaya at the wrong time which has probably compounded the situation with all those extra vessels with no work. Todays price, 29 cents. Future price I would hate to guess but no exploration due to low oil price is damning. The demise from 2013 ......

Untitled.png
 
Is the time to be a contrarian? Is there anything positive about MRM? I can't remember why I have this on my watchlist? Do I have the time to read any of its reports or would a quick glance at a chart with zero knowledge, tell me not yet? Less than 10% of its high of 2013. Something dramatic has happened.
Better study some other company. No funds available; can not to be a contrarian at the moment.
 
Faramir said:
Is the time to be a contrarian? Is there anything positive about MRM? I can't remember why I have this on my watchlist? Do I have the time to read any of its reports or would a quick glance at a chart with zero knowledge, tell me not yet? Less than 10% of its high of 2013. Something dramatic has happened.
Better study some other company. No funds available; can not to be a contrarian at the moment.
Click to expand...

Yes and no. You probably have it on the watchlist because it's trading at a very low multiple and price/NTA.

The ships they have are worth a lot on the books ($1B in fixed assets, despite the fact that vessels are not fixed by any means). Debt is around $440m so you are looking at a theoretical book value of $1.50 per share.

However, this $1B fleet is not bring in much earnings, and there's excess capacity everywhere in an industry where demand is falling off a cliff. A fire sale of the vessels (if there's a market at all) will quickly reduce a good part of the NTA margin. So if vessels are sold @ 60% of book value, you get net equity of ~$150m after debt, compared to market cap of $90m @ 24c.

This would all work pretty well IF MRM can actually survive the banking covenant. Any further deterioration in the EBITDA (which is more than possible due to the low earning visibility) might see a breach and who knows what happen after that.

MRM with it's current fleet can potentially earn >$60m at the cycle's peak. The question is if the peak is ever coming back, and if MRM will survive to see it again.

To invest now would probably require assumption of total loss. Or one can potentially wait until the balance sheet issue is fixed before taking a position.
 
skc said:
Yes and no. You probably have it on the watchlist because it's trading at a very low multiple and price/NTA.

The ships they have are worth a lot on the books ($1B in fixed assets, despite the fact that vessels are not fixed by any means). Debt is around $440m so you are looking at a theoretical book value of $1.50 per share.

However, this $1B fleet is not bring in much earnings, and there's excess capacity everywhere in an industry where demand is falling off a cliff. A fire sale of the vessels (if there's a market at all) will quickly reduce a good part of the NTA margin. So if vessels are sold @ 60% of book value, you get net equity of ~$150m after debt, compared to market cap of $90m @ 24c.

This would all work pretty well IF MRM can actually survive the banking covenant. Any further deterioration in the EBITDA (which is more than possible due to the low earning visibility) might see a breach and who knows what happen after that.

MRM with it's current fleet can potentially earn >$60m at the cycle's peak. The question is if the peak is ever coming back, and if MRM will survive to see it again.

To invest now would probably require assumption of total loss. Or one can potentially wait until the balance sheet issue is fixed before taking a position.
Click to expand...

It would be immoral to not back up the truck and load up on this one :D
 
luutzu said:
It would be immoral to not back up the truck and load up on this one :D
Click to expand...

Lol. It would be irresponsible to your own financial well being to ignore the risks.

Take a look at the likes of BLY, EHL, BOL, BKN etc.... they all went through a similar phase. Share price in free fall, historical PE at low single digit and looked attractive and appeared to be a screaming buy for the uninitiated. On the other hand, they all have balance sheets filled with physical assets funded by debt, purchased at the peak of the cycle, idling in the yard. When the cycle turned down, volume fell as fast as margins. The operational leverage of high fixed cost, low op ex worked perfectly in reverse. This means that every competitor price their service at cash costs and hope the cycle turns before the bankers get cold feet and call in the loans.

Back to MRM: It seems totally ridiculous that it is STILL spending capex and building new vessels, At a time when they should be conserving cash and the existing fleet is at 50% utilisation. Did they only win the tender on the promise that they will be deploying a spanking new ship? If so what's the point of bidding for that project?!
 
Top