Where to ...supply base?, page-27

Come on Ben.

What is a "value investor"?

Buying something at about a quarter of its book value seems like pretty good value to me. Especially when its book value have been written down by about half a billion dollars and the company is going for about $80 to $90M.

The write downs are not all "reality". It serves two purpose, one of which is to not pay tax; the other is to get a tax return.

Yes, there's a glut of ships and a lack of jobs. So if these vessels are all offloaded it'd be what MRM's independent valuer is putting on it... but the boats are not all for sale are they?

So if you're a proper manager of a business, one that ignore the stock market, why in the world would you not take this opportunity and claim massive (legal) paper losses to defer taxes and get tax returns?

I'd be really nervous if management doesn't write down these massive losses. I mean, the only issue with these kind of massive non-cash impairment write-downs is it would screw up the debt-ratio and thereby potentially violating debt covenant. But if the banking syndicates are satisfy and agreed to delayed repayment... we're still worried about it going bankrupt because the bank might call in its debt?

Putting all my armchair thinking aside, the banks are satisfied, two experienced industry player have taken major interests in MRM... management reporting of increased tendering activities; oil looks to be stabilising at current level or higher over the next couple of years.


The above is assuming MRM will go on its business as usual. There are potential takeover from the two major shareholders or from private equity. That's not just a dream is it?

So while it's not a sure fire investment, it's definitely not gambling.

I mean, we can't all pick a Sirtex where the market loses its mind for a couple weeks before it got more rational again. But even with a sure thing like Sirtex, the future is still uncertain with its major research and venture into new markets. Its share price could still take a hit.

Careful about putting too much faith into what the general market is thinking.