Peak-to-trough, the MSCI World Energy Equipment & Services index fell 43 per cent since midway through last year and, although crude oil prices appear to have stabilised during the second quarter of 2015, investor sentiment towards oil services companies remains lukewarm. However, we think that the sector-wide pullback has opened up buying opportunities for investors - take Gulf Marine Services (GMS), an oil services company that remains in expansionary mode.
- Much work with state-owned oil majors
- Relatively stable revenues
- Fleet expansion on track
- High utilisation rates
- Lukewarm sentiment towards oil services shares
- Downward pressure on hire rates
Gulf Marine’s share price is down by a quarter during the past 12 months. This is overly harsh because, by comparison with industry peers, the company’s business mix offers more resilience against oil price fluctuations. And Gulf Marine is expanding its services capacity significantly. So, in a sense, the company combines both defensive and growth characteristics.