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GulfMark Offshore (GulfMark Offshore) Earnings Power Value (EPV) : $-120.62 (As of Sep18)


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What is GulfMark Offshore Earnings Power Value (EPV)?

As of Sep18, GulfMark Offshore's earnings power value is $-120.62. *

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

Margin of Safety is N/A.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.


GulfMark Offshore Earnings Power Value (EPV) Historical Data

The historical data trend for GulfMark Offshore's Earnings Power Value (EPV) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

GulfMark Offshore Earnings Power Value (EPV) Chart

GulfMark Offshore Annual Data
Trend Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17
Earnings Power Value (EPV)
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GulfMark Offshore Quarterly Data
Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18
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Competitive Comparison of GulfMark Offshore's Earnings Power Value (EPV)

For the Oil & Gas Equipment & Services subindustry, GulfMark Offshore's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


GulfMark Offshore's Earnings Power Value (EPV) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, GulfMark Offshore's Earnings Power Value (EPV) distribution charts can be found below:

* The bar in red indicates where GulfMark Offshore's Earnings Power Value (EPV) falls into.



GulfMark Offshore Earnings Power Value (EPV) Calculation

Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.

GulfMark Offshore's "Earning Power" Calculation:

Average of Last 20 Quarters Last Quarter
Revenue 234.46
DDA 58.35
Operating Margin % -25.10
SGA * 25% 10.48
Tax Rate % 4.22
Maintenance Capex 58.40
Cash and Cash Equivalents 37.53
Short-Term Debt 0.00
Long-Term Debt 93.60
Shares Outstanding (Diluted) 10.00

1. Start with "Earnings" not including accounting adjustments (one-time charges not excluded unless policy has changed). "Earnings" are "Operating Income.

2. Look at average margins over a business/Industry cycle: Average Operating Margin = -25.10%

To normalize margins and eliminate the effects on profitability of valuing the firm at different points in the business cycle, it is usually best to take a long-term average of operating margins. Ideally this would be as long as 10 years and include at least one economic downturn. However, since most of companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year margin.

3. Multiply average margins by sustainable revenues and then adjust for maintenance SGA. This yields "normalized" EBIT:

To be conservative, GuruFocus uses an average of the 5 year revenues as the sustainable revenue.
EPV analysis recognises that part of SG&A expenditure is made to maintain and replace the existing assets, while part is made to grow sales. Since EPV is only interested in what it costs a going concern to maintain its existing asset base, it adds back a percentage of SG&A (between 15% and 50% - this is a matter of judgment and industry knowledge) to make up for the fact that some of this expenditure went to fund growth and shouldn't be accounted for. To start off, we assume 25% for the sake of prudence.
Sustainable Revenue = $234.46 Mil, Average Operating Margin = -25.10%, Average Adjusted SGA = 10.48,
therefore "Normalized" EBIT = Sustainable Revenue * Average Operating Margin + Average Adjusted SGA = 234.46 * -25.10% +10.48 = $-48.36349811 Mil.

4. Multiply by one minus Average Tax Rate (NOPAT):

Same as average operating margin calculation, GuruFocus takes an average of the 5 years tax rates.
Average Tax Rate = 4.22%, and "Normalized" EBIT = $-48.36349811 Mil,
therefore After-tax "Normalized" EBIT = "Normalized" EBIT * ( 1 - Average Tax Rate ) = -48.36349811 * ( 1 - 4.22% ) = $-46.322074854777 Mil.

5. Add back Excess Depreciation (after tax at 1/2 average tax rate). This yields "normalized" Earnings:

Excess Depreciation = Average DDA * % of Excess Depreciation (after tax at 1/2 average tax rate) = 58.35 * 0.5 * 4.22% = $1.231447203 Mil.
"Normalized" Earnings = After-tax "Normalized" EBIT + Excess Depreciation = -46.322074854777 + 1.231447203 = $-45.090627651777 Mil.

6. Adjusted for Maintenance Capital Expenditure:

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Third, calculate Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
Fourth, GuruFocus uses an average of the 5 year maintenance capital expenditures as maintenance CAPEX.
GulfMark Offshore's Average Maintenance CAPEX = $58.40 Mil *.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

7. Investors require a return of "WACC" for the risk they are taking: WACC = 9%

8. GulfMark Offshore's current cash and cash equivalent = $37.53 Mil.
GulfMark Offshore's current interest bearing debt = Long-Term Debt & Capital Lease Obligation + Short-Term Debt & Capital Lease Obligation = 93.60 + 0.00 = $93.596 Mil.
GulfMark Offshore's current Shares Outstanding (Diluted Average) = 10.00 Mil.

GulfMark Offshore's Earnings Power Value (EPV) for Sep18 is calculated as:

EPV = ( ( Norm. Earnings-Maint. CAPEX *) / WACC + CashandEquiv - Int. Bearing Debt ) / Shares Outstanding (Diluted Average)
= ( ( -45.090627651777 - 58.40)/ 9%+37.53-93.596 )/10.00
=-120.62

Margin of Safety (EPV)=( Earnings Power Value (EPV)-Current Price )/Earnings Power Value (EPV)
=( -120.62144390187-28.37 )/-120.62144390187
= N/A

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.


GulfMark Offshore  (AMEX:GLF) Earnings Power Value (EPV) Explanation

Assumption: Current profitability is sustainable.

Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.


Be Aware

Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.


GulfMark Offshore Earnings Power Value (EPV) Related Terms

Thank you for viewing the detailed overview of GulfMark Offshore's Earnings Power Value (EPV) provided by GuruFocus.com. Please click on the following links to see related term pages.


GulfMark Offshore (GulfMark Offshore) Business Description

Industry
Traded in Other Exchanges
N/A
Address
GulfMark Offshore Inc is engaged in providing offshore marine services primarily to companies involved in the offshore exploration and production of oil and natural gas. Its vessels transport materials, supplies, and personnel to offshore facilities, and also move and position drilling and production facilities. Geographically, the operation of the firm can be seen across the region of the North Sea, offshore Southeast Asia, and offshore the Americas. It operates a fleet of over 69 owned or managed offshore supply vessels (OSVs), which include over 28 vessels in the North Sea, over 10 vessels offshore Southeast Asia and over 31 vessels offshore the Americas.
Executives
Samuel R Rubio officer: Senior VP and CFO 10111 RICHMOND AVE., STE. 340, HOUSTON TX 77042
Eugene I Davis director 8540 GANDER CREEK DRIVE, MIAMISBURG OH 45342
Krishna Shivram director C/O WEATHERFORD INTERNATIONAL PLC, 2000 ST JAMES PLACE, HOUSTON TX 77056
Quintin Kneen director, officer: President & CEO 400 N. SAM HOUSTON PKWY E. #900, HOUSTON TX 77060
William C Martin director, 10 percent owner C/O RAGING CAPITAL MANAGEMENT, LLC, TEN PRINCETON AVENUE, PO BOX 228, ROCKY HILL NJ 08553
Raging Capital Management, Llc director, 10 percent owner TEN PRINCETON AVENUE, PO BOX 228, ROCKY HILL NJ 08553-0228
Scott Mccarty director 301 COMMERCE STREET, SUITE 2975, FORT WORTH TX 76102
Kenneth H Traub director, other: See Remarks
Geoffrey Raynor director, 10 percent owner 301 COMMERCE STREET, SUITE 3200, FORT WORTH TX 76102
Renegade Swish, Llc director, 10 percent owner 301 COMMERCE STREET, SUITE 3200, FORT WORTH TX 76102
Louis Raspino director 1330 POST OAK BLVD, STE 2700, HOUSTON TX 77056
Tidewater Inc 10 percent owner 842 WEST SAM HOUSTON PARKWAY NORTH, SUITE 400, HOUSTON TX 77024
David E Darling officer: Former SVP - CHRO 6002 ROGERDALE ROAD, SUITE 600, HOUSTON TX 77072
Sheldon S Gordon director
David J Butters director RELIANT STADIUM TWO RELIANT PARK, HOUSTON TX 77054