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Is TDW on a sustained upturn? From what I can gather from the Fool, the oil stocks are up because of the hurricane and fear/hope of disrupted oil shipments.

Should I be more positive? Their numbers look good overall. Nice cash flow. But, I'm a little wary about their debt ratio... and I remember the pessimistic tone of earlier messages referencing TDW's old rigs and depreciated equipment. Probably need to buy new stuff real soon. Any info on this front?

- Shari


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>>>But, I'm a little wary about their debt ratio...<<<

I just reviewed their Balance Sheet for the latest quarter, and it is in fine shape. What is it you are wary about?
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Maybe "wary" was a bad word choice. How about "hesitant"? Welcome to my world of pessimism...

Per the Fool's snapshot page:
LT Debt/Equity (MRQ) 0.02
Total Debt/Equity (MRQ) 0.03

Now, I am new at this but aren't these numbers low? I realize it is a good thing to be able to totally cover your debt - if the number was a very high whole number that would mean that debt outweighs equity and the company may have trouble repaying loans - but what about the number being too low?

You see, I may be putting too much into what someone wrote previously about TDW not investing in new equipment even as old equipment deprecitates out, but, it seems that TDW may be underutilizing their borrowing power. I don't know how to check this, but, if they are almost fully depreciated on their equipment, with low interest expense on loans (also from the Fool's snapshot page), they are going to take a serious hit when and if they do finally get around to investing in new rigs, etc.

Or course, I may be specualating from total misinformation. One should never trust hearsay.
- Shari
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>>>You see, I may be putting too much into what someone wrote previously about TDW not investing in new equipment even as old equipment deprecitates out, but, it seems that TDW may be underutilizing their borrowing power. I don't know how to check this, but, if they are almost fully depreciated on their equipment, with low interest expense on loans (also from the Fool's snapshot page), they are going to take a serious hit when and if they do finally get around to investing in new rigs, etc.<<<


This gets into "circle of competence" issues, and I am not particularly competent to comment on the state of TDW's fleet. I don't have a good idea of the shelf life of TDW's fleet and equipment, nor where TDW's equipment is in terms of its' life cycle. I have read what I could find in terms of SEC filings, etc. that discuss the capital expenditure issues, and have found no mention of unusually large anticipated expenditures. There is comment that periodic maintenence of TDW's fleet could impact revenues, etc., but no red flag about imminent problems.

What I have noticed, based on a somewhat cursory review of TDW's 10 year history, is that they have generated enough cash that debt hasn't been necessary for expansion and capital expenditures. TDW is a company somewhat tied to a commodity's rise and fall in price, I would prefer that they not be leveraged at all. Again, I have yet to get deep into my research, so perhaps someone that has can comment.
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Thanks for the insight... clearly I need to do a bit more research as well...
- Shari
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I'm not too sure about the equipment depreciation issue or it's fleet condition. What I do know, is that TDW has routinely repurchased stock to bolster its share price. This is a sign of very healthy company when one considers the current financial environment. In short, available cash does not seem to be TDW's problem, hence I don't think it will be "caught with its pants down" when the up turn comes.

~ Y
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