Seacor Is 'Making The Most Of A Poor Energy Market,' Stifel Says

Seacor, an oilfield services company, has one of the largest fleets of offshore service vessels and one of the largest inland barge operations.

"While this private equity style model is difficult to value, we estimate that on a sum-of-the-parts basis, the total enterprise value is worth just over $1.48 billion and after adjusting for the net debt we estimate value per share of $70 which is the basis of our target price and Buy rating," analyst Benjamin Nolan wrote in a note.

Nolan said Seacor is far more similar to a private equity firm. As such, the most important component of value is the company's ability to buy, sell and operate assets and thereby generate strong returns. Since 2000, the company has generated more than $500 million ($29/share) of net gain from the sale of assets.

With respect to fixed assets, Seacor has exposure to the offshore oilfield services business at 37 percent followed by shipping services at 30 percent and inland river barges at 22 percent.

"As a consequence, the diverse stream of cash flows enables Seacor to generate positive cash flow despite challenging conditions in any individual market," Nolan highlighted.

Further, Nolan noted that the groundwork has been laid for a potential spin-out of the offshore segment through the sale of $175 million of convertible bonds to The Carlyle Group LP CG.

"We believe the market could be near a trough cycle and also believe as energy prices rise the market should begin to improve, leading to an opportune divestiture by SEACO0R," Nolan added.

Nolan expects a loss of $5.61 a share in 2016, and a loss of $0.64 a share in 2017. The analyst projects EBITDA of 105.6 million and 154.0 million for 2016 and 2017, respectively.

At time of writing, shares of Seacor were up 3.81 percent at $59.45.

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