Thalassa Holdings - broker upgrades

House broker to Thalassa Holdings has issued an update lifting their current year earnings estimates to 12.1c (c8p) and target price to 86p. The revised estimates follow THAL’s recent trading update which confirmed contracted revenue of US$15m for the current financial year.

Revised earnings estimates prudently allow for an increase in the cost of sales as a percentage of revenue to 63% (from 50%) due to the likelihood of lower margin contracts using new technology. They also assume an increase in administration expenses and tax rate.

Revised estimates look easily achievable to us, although the execution risk for a small business remains.

Despite the recent boost to the share price, the shares still only trade broadly on a par with the net asset value at 31st December 2011 of US$9m (£5.76m) which included nearly US$2m of cash.

Remains an interesting one to follow at current lowly levels

http://www.investorschampion.com/blog/entry/thalassa-holdings-broker-upgrades

The write is a holder

Off nearly 30% today.

I certainly got it right about it going to go a long way.....but not in the right direction......well you know...it was 50..50....

Cant win the all rf.

Today’s announcement confirms that as at 16th March 2015 the Group had cash of US$16.4m (including US$2.2 million which is restricted) and no debt.

This suggests that at the current market capitalisation (£10.85m) the shares are trading at close to net cash with zero value assigned to any other parts of the business which include some excellent equipment and technology, valuable seismic data and a long term agreement contract with one of the world’s largest oil and gas groups.

Read our latest commentary at http://tinyurl.com/phy3z7f

It is not surprising at the moment that oil equipment and services stocks are finding little support, although there are some pockets of value appearing which could offer material upside to patient long term investors.

We consider some of the more appealing candidates, all of which possess the desired sturdy balance sheets to weather the current tough conditions.

Thalassa’s current share price (44p) and market capitalisation (£11m) still implies that this is a business in peril and struggling for survival. However, the robust balance sheet, including significant cash, surely suggests to the contrary. Not only is Thalassa seemingly very well placed to survive, with the business underpinned by a significant contract with Statoil but, given its service and technology offering, it appears to be extremely well placed to prosper in a tough competitive market that demands innovation and greater flexibility.

Read more about Thalassa Holdings and other companies at http://tinyurl.com/p65nfgn