Stock Alert for Helix Energy Solutions Group Inc. (HLX)
Helix Energy Solutions Group Inc. (HLX) is an international offshore energy company providing reservoir development solutions and other contracting services to the energy market, as well as to its own oil and gas properties. The Company’s Contracting Services segment utilizes its vessels, offshore equipment and methodologies to deliver services that may reduce finding and development (F&D) costs and encompass the complete lifecycle of an offshore oil and gas field. Its Oil and Gas segment engages in prospect generation, exploration, development and production activities. Its primary operations are located in the Gulf of Mexico, North Sea, Asia Pacific and West Africa regions. HLX provides a range of contracting services primarily in the Gulf of Mexico, North Sea, Asia Pacific and West Africa regions primarily in deepwater. Its services include subsea construction, well operations and production facilities.
The Company was incorporated in 1979 and is headquartered in Houston, Texas.
| Share Statistics (14-June-10) | FY
2008 |
FY
2009 |
%
Chg |
Q1 2009 | Q1
2010 |
%
Chg |
||
| Symbol | HLX | Revenue, $Mn | 2,114.07 | 1,461.69 | -30.9% | 570.98 | 201.57 | -64.7% |
| Current price | $11.59 | Gross marg. | 17.6% | 16.6% | -5.7% | 28.2% | 12.5% | -55.7% |
| 52wk Range: | 8.76-17.00 | Oper. margin | – | 13.9% | – | – | -4.2% | – |
| Avg Vol (3m): | 5,826,993 | Net margin | -30.1% | 10.7% | -135.5% | 18.8% | -8.8% | -146.8% |
| Market Cap. | 1.21B | |||||||
| Shares Outstanding | 104.56M | EPS, $ | -0.87 | 1.58 | -281.6% | 0.08 | 0.06 | -25% |
Source: Reuters.com, SEC Filings.
Financial Summary
HLX reported a net loss of $17.9 million, or $0.17 per diluted share, for the first quarter of 2010 compared with net income of $53.5 million, or $0.50 per diluted share, for the same period in 2009, and a net loss of $55.7 million, or $0.53 per diluted share, in the fourth quarter of 2009.
Consolidated net debt at March 31, 2010, increased slightly to $1.15 billion from $1.09 billion as of December 31, 2009. The Company had no borrowings under its revolver and its availability was $386 million at March 31, 2010. Together with cash on hand of $212 million and its revolver availability, HLX’s total liquidity was approximately $598 million at March 31, 2010. Net debt to book capitalization as of March 31, 2010, was 45%.
As of March 31, 2010, HLX was in compliance with its debt covenants under its various loan agreements. On February 19, 2010, the Company amended its credit agreement by revising the consolidated leverage ratio covenant test and adding an additional senior secured debt leverage ratio test. The amendment is effective for periods ending on or after March 31, 2010.
The Company incurred capital expenditures (including capitalized interest) totaling $75 million in the first quarter of 2010, compared to $119 million in the fourth quarter of 2009 and $65 million in the first quarter of 2009 (excluding amounts related to Cal Dive in first quarter 2009).
Source: Helix Energy Solutions Group Inc.
| Financial Strength (14-June-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 1.44 | 1.15 | 0.71 | 0.81 |
| Current Ratio (MRQ) | 1.51 | 1.33 | 0.96 | 0.96 |
| LT Debt to Equity (MRQ) | 96.47 | 49.46 | 34.51 | 133.21 |
| Total Debt to Equity (MRQ) | 97.32 | 61.78 | 44.12 | 198.72 |
| Interest Coverage (TTM) | – | 7.82 | 13.08 | 41.82 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst 8 polled investment analysts. Against the Helix Energy Solutions Group Inc company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 6 | 1 | 1 | 0 | 0 | 2 |
| 4 weeks ago | 6 | 1 | 1 | 0 | 0 | 2 |
| 2 months ago | 5 | 2 | 1 | 0 | 0 | 2 |
| 3 months ago | 5 | 2 | 1 | 0 | 0 | 2 |
| Last year | 3 | 1 | 3 | 0 | 0 | 2 |
The 6 analysts offering 12 month price targets for HLX have a median target of 20.50, with a high estimate of 22.00 and a low estimate of 18.00. The median estimate represents a 94.50% increase from the last price of 10.54.
Source: www.ft.com
Consensus Estimates Analysis
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=HLX
Investment Highlights
HLX shares soared on news that its floating production unit, the Helix Producer I (HPI), has been contracted by BP to assist in the latter’s Gulf of Mexico oil spill response operations. The Company announced Sunday that HPI is expected to help BP for a minimum of 60 days. The unit will join two other contracting services vessels owned by HLX, the Express and Q4000, in supporting BP on the Deepwater Horizon spill response and containment operations. The Q4000 has been providing services to BP since the beginning of May.
The Company has said that as a result of the HPI’s involvement in the BP spill response, production from its Phoenix deepwater oil field, also in the Gulf, will be deferred. It expects the financial contribution from the BP HPI contract will offset the loss from deferred production.
The Company said it has no operations affected the U.S. Department of Interior’s industry-wide deepwater drilling moratorium. Four of the Company’s Contracting Services vessels are currently operating in the Gulf of Mexico; subsea construction vessels Intrepid, Express, and Caesar, and the multipurpose intervention vessel Q4000. The Company said these assets generally have contracted backlog of durations ranging from three to six months for work unaffected by restrictions imposed by the moratorium.
As of last close on June 14 2010, HLX closed at 11.59, 32.31% above the 52 week low of 8.76 set on July 08, 2009.
Source: www.helixesg.com; markets.ft.com; reuters.com
Technical Analysis
Source: http://stockcharts.com
Friday, HLX closed above its 13 day moving average. This is generally considered to be an indication of a bullish trend.
HLX is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
HLX’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| June-14-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| Oceaneering International | OII | 45.54 | 2,510 | 14.46 | 11.83 | 1.36 | 1.24 |
| Acergy S.A. (ADR) | ACGY | 15.35 | 2,800 | 15.51 | 12.28 | 1.22 | 1.09 |
| Global Industries Ltd. | GLBL | 5.30 | 608.98 | 33.33 | 8.83 | 0.93 | 0.73 |
| Oil & Gas Equipment & Services Median | 21.34 | n/a | 1.20 | n/a | |||
| Helix Energy Solutions Group Inc. | HLX | 11.59 | 1,210 | 15.66 | 7.48 | 1.03 | 0.85 |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHSE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | 251,575 | 5 |
| Sales | 28,022 | 2 |
| Net Shares Purchased (Sold) | 223,553 | 7 |
| Total Insider Shares Held | 8.44M | n/a |
| % Net Shares Purchased (Sold) | 2.7% | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | (17,083,300) |
| % Change in Institutional Shares Held | (25.7%) |
Source: Yahoo Finance
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