Friday, September 23, 2011

Tidewater's Worsening Prospects In Fall 2011

I was reluctant to exit my position in Tidewater (TDW) a few months ago when I realized their balance sheet no longer had the strength I preferred (i.e., long-term debt should be less than twice net income).  I am even more grateful now that I made that call.  Tidewater has released pessimistic expectations for this quarter's revenue.  I guess their strong market position doesn't translate into pricing power.  Recent weakness in the price of oil probably doesn't help make offshore drilling projects desirable, and that's Tidewater's bread and butter. 

Full disclosure:  No position in TDW at the present time.