Gulf Marine Services Plc Value Analysis 2016 (LSE:GMS)

Gulf Marine Services Plc Value Analysis 2016 (LSE:GMS)

Gulf Marine Services was founded in Abu Dhabi, UAE, in 1977.  GMS is the largest provider of self-propelled, self-elevating accommodation jackup barges in the world.   GMS constructs and maintains its vessels at its yard in Abu Dhabi.  The company has a new build and replacement programme of self elevating support vessels.   GMS operates its fleet from its offices in Abu Dhabi, Saudi Arabia and the United Kingdom.

The GMS fleet of self-propelled jackup barges is capable of working in harsh weather environments.

GMS has borrowed money to build some new ships.  The debt, which is in the form of bank borrowing, creates risk for common stock holders.  The price of the common stock has declined about 80% since the initial public offering in 2014.

The opportunity for value investors comes thanks to the low price, which is now well below the value of the assets.  Value investors will also appreciate that the assets are mostly big metal items that have resale and scrap value.

GMS has also demonstrated an ability to grow earnings.  The current price is also cheap in comparison to earnings even based on the July 2016 earnings update from the company.

To find out the exactly how cheap GMS is in comparison to its assets and its earnings  click ‘Add to basket’.  Then follow the instructions to download the analysis.