Royce Nears 6% Ownership of Seacor Holdings

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We can compare Seacor to GulfMark Offshore, Inc. (NYSE:GLF), Hornbeck Offshore Services, Inc. (NYSE:HOS), Tidewater Inc. (NYSE:TDW), and Kirby Corporation (NYSE:KEX), which are all involved in the marine transportation business. Hornbeck- which primarily operates offshore supply vessels- is something of an anomaly trading at 32 times trailing earnings, though the company has been experiencing good revenue growth. The other three comparable companies have trailing P/Es between 17 and 19- so they are priced at a discount to Seacor at least on that basis. In general, analyst expectations are for these companies to improve over the next year as well, and Gulfmark and Tidewater stand out for having market caps only 10 or 11 times forward earnings estimates- cheap, if the companies can get there. We would also note that in terms of EBITDA multiples, Seacor is actually the company carrying the premium pricing at an EV/EBITDA of 10 as opposed to the 8-9 range where we find its peers.

Seacor isn’t particularly attractive, but it is at least possible that it will continue its impressive growth performance and even from more of a value perspective Royce may be on to something as far as the industry in general is concerned. If the conditions that would make Seacor a good investment come to pass they should certainly benefit companies such as Gulfmark and Tidewater, which may be in the process of becoming outright cheap if they meet expectations in the next couple quarters. They may make good watchlist stocks.

Disclosure: I own no shares of any stocks mentioned in this article.

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