Neptune Marine Services Limited (NMS.AX) are not self funding but are creating value.

Analysis PDF: Initial Analysis and Valuation of Neptune Marine Services Limited (NMS.AX)

While I prefer to invest in companies that are both self funding and creating value from a Hewitt Heiserman’s It’s Earnings That Count perspective, I occasionally forsake my better judgment and dip my toe into unabashed growth stories like Neptune.

I recently bought a small parcel of shares to ensure I could take part in the share purchase plan (SPP) at $0.50 which closes on 17 July. I still have not decided whether to partake in the offer, and won’t until next week when the kids are back at school. I need a large chunk of undisturbed time to wade through their acquisitions and past announcements. However, Neptune has passed my first analysis. There appears to be a better than 3:1 reward/risk profile, they are creating value and there is organic growth on top of their acquisitions. The key metrics look good; EV/EBIT at 5.7, P/S and P/B both under 1 and P/E on consensus earnings of 7.2. Their specific growth story and the larger oil services story are both excellent yarns.

The risk in the acquisition strategy. Studies have shown that around 80% of acquisitions fail to create value.

Analysis PDF: Initial Analysis and Valuation of Neptune Marine Services Limited (NMS.AX)

Initial Post on Neptune Marine Services

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This is not a recommendation and is for entertainment purposes only.

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