Investors hate anything to do with the energy sector right now.
Mitcham Industries, Inc.
(
MIND
) has sold off about 26% in just the month of May alone. That makes
this Zacks #1 Rank (Strong Buy) a big value with a forward P/E of
just 6.8.
Mitcham supplies rental or new seismic equipment to the oil and gas
industry, seismic contractors, government agencies and
universities. It also manufactures specialized seismic marine
equipment through its Seamap brand.
A global company headquartered in Texas, it has sales and service
offices in Canada, Australia, Singapore, Russia, Peru, Colombia,
and the United Kingdom.
Record Fiscal 2012 Fourth Quarter
On Apr 3, Mitcham reported its fiscal 2012 fourth quarter results
and blew by the Zacks Consensus Estimate by 43%. Earnings per share
were 77 cents compared to the consensus of 55 cents. It made just
17 cent in the year ago quarter.
Revenue soared 88% to a record $37 million from $19.7 million a
year ago. Sales were propelled by equipment leasing which rose 87%
to $23.7 million from $12.7 million in the 2011 fiscal fourth
quarter.
The company benefited from higher utilization and a strong global
seismic market, particularly in the United States, Latin America,
Europe and North Africa. There was also strong activity in the
marine leasing business.
"Demand for land seismic rental equipment in the U.S. has picked up
sequentially, mainly driven by activity in several of the shale
plays," said Bill Mitcham, the President and CEO.
Fiscal 2013 Still Looking Strong
As of Apr 3, the company continued to see indications of strong
demand for seismic services, especially in the international
markets.
The trends that produced record quarters in fiscal 2012 have
continued into fiscal 2013. All of its land recording channels have
been committed during the first quarter, as was the case in fourth
quarter of fiscal 2012. That indicates a good utilization of its
lease pool.
It also entered into fiscal 2013 with a strong order book at
Seamap.
Fiscal 2013 Zacks Consensus Estimate Rises
Given the strong fiscal fourth quarter and bullish outlook, it's
not surprising that the fiscal 2012 Zacks Consensus Estimate has
jumped 12% to $2.66 from $2.34 in the last 60 days.
That is earnings growth of 32% over fiscal 2012 where it made just
$2.02 per share.
Plenty of Value
Shares have significantly weakened over the last few weeks.
Mitcham is now an even deeper value. Its P/E of 6.8 is well below
that of its peers which average 13.4.
Additionally, the company has a price-to-book ratio of only 1.4. A
P/B under 3.0 usually means there is value.
Mitcham also has a 1-year return on equity (ROE) of 18%. That
easily beats its peers which average only 7.1%.
If you're an investor looking for a beaten down value stock with
double digit earnings growth, you may want to consider Mitcham.
Tracey Ryniec is the Value Stock Strategist for
Zacks.com
. She is also the Editor of the Turnaround Trader and Insider
Trader services. You can follow her on twitter at
@TraceyRyniec
.
MITCHAM INDS (MIND): Free Stock Analysis Report
MITCHAM INDS (MIND): Free Stock Analysis Report
MITCHAM INDS (MIND): Free Stock Analysis Report
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