Tidewater Inc (TDW) Valuation

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Company Profile (obtained from Google Finance): Tidewater Inc. provides offshore supply vessels and marine support services to the offshore energy industry through the operation of offshore marine service vessels. As of March 31, 2008, the Company had a total of 430 vessels, of which 10 were operated through joint ventures, 61 were stacked and 11 vessels withdrawn from service. The Company provides services supporting all phases of offshore exploration, development and production, including towing of and anchor handling of mobile drilling rigs and equipment; transporting supplies and personnel necessary to sustain drilling, workover and production activities; assisting in offshore construction activities, and a variety of specialized services, including pipe laying, cable laying and three-dimensional (3-D) seismic work. The Company operates in two segments: United States and International.

ModernGraham Comments: None at this time.

Defensive and Enterprising Investor Tests:

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 7/7

1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
3. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
4. Dividend Record – has paid a dividend for at least 10 straight years – PASS
5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
6. Moderate PEmg ratio – PEmg is less than 20 – PASS
7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass at least 4 of the following 5 tests: Score = 5/5

1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – PASS
3. Earnings Stability – positive earnings per share for at least 5 years – PASS
4. Dividend Record – currently pays a dividend – PASS
5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary:

• Last Updated    10/6/2010
• MG Value    $103
• MG Opinion    Undervalued
• Value Based on 3% Growth    $75
• Value Based on 0% Growth    $44
• Market Implied Growth Rate    0.01%
• Net Current Asset Value (NCAV)    -$6.83
• PEmg    8.52
• Current Ratio    2.43
• PB Ratio    0.92

Key Data:

Balance Sheet – 3/31/2010

Earnings Per Share – Diluted

• 2011 (estimate) – $2.95
• 2010    $5.02
• 2009    $7.89
• 2008    $6.39
• 2007    $6.31
• 2006    $4.07
• 2005    $1.78
• 2004    $0.73
• 2003    $1.57
• 2002    $2.41
• 2001    $1.53
• 2000    $1.37

Earnings Per Share – Modern Graham

• 2011 (estimate) – $5.17
• 2010    $6.17
• 2009    $6.26
• 2008    $4.91
• 2007    $3.75
• 2006    $2.35
• 2005    $1.53

Valuation History:

• 10/6/10 – Value $103, Actual Price $44.10, Undervalued & Defensive
• 6/30/10 – Value $237, Actual Price $39.38, Undervalued & Defensive
• 12/30/09 – Value $236, Actual Price $47.97, Undervalued & Defensive
• 9/25/09 – Value $235, Actual Price $45.60, Undervalued & Defensive