Do You Believe in the Long-Term Growth Outlook of Tidewater (TDW)?

Black Bear Value Partners, an investment management firm, published its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -7.1% in September and -1.0% in the quarter, and -12.7% YTD. The S&P 500 returned +3.6% September, +8.1% in the quarter, and +14.8% year-to-date. HFRI Value Index returned +1.3% in September, +5.9% in the quarter, and +13.7% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Black Bear Value Fund highlighted stocks such as Tidewater Inc. (NYSE:TDW). Tidewater Inc. (NYSE:TDW) provides offshore support vessels and marine support services to the offshore energy industry. The one-month return of Tidewater Inc. (NYSE:TDW) was -11.73%, and its shares lost 21.45% of their value over the last 52 weeks. On October 8, 2025, Tidewater Inc. (NYSE:TDW) stock closed at $52.96 per share, with a market capitalization of $2.621 billion.

Black Bear Value Fund stated the following regarding Tidewater Inc. (NYSE:TDW) in its third quarter 2025 investor letter:

“Tidewater Inc. (NYSE:TDW) is a marine services firm that operates one of the worlds largest fleets of offshore support vessels (OSV’s). They serve the energy industry by transporting crew and supplies, towing and anchoring drillships and supporting offshore construction projects. The long-term outlook for international and offshore markets is strong while the near-term is a little cloudier. As current resource plays (the Permian) slow down worldwide demand will continue to grow and require more oil. It is expected that offshore capital commitments will rebound in the next 1-2 years.

What’s striking about this industry is the lack of investment in the OSV fleet. Since the GFC global shipyard capacity has shrunk by nearly 60%. In addition, newbuild investment is lacking as many banks have pulled back from lending. Over the next decade, as fleets age, the global OSV market is expected to shrink by ~40%.

What this adds up to is a potential for large pricing moves, in our favor, coupled with high utilization. But we do not have to bank on that as they are currently generating $300MM+ in FCF vs. a $2.7bb market cap or an 11% yield. In a more normal environment, I’d expect them to generate 500mm-1bb which gets to ~20-35% yields. Importantly their share buybacks were historically limited by debt covenants. That debt has been paid off (they have minimal debt now) and they recently instituted a buyback plan for $500MM.”

In another article, we covered Tidewater Inc. (NYSE:TDW) and shared the list of best short-term stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.