RE:Just bought inWelcome to the Board!
For the record I also bought more shares earlier this week but I had a slight twinge of pain when I clicked on the "Submit Order" button as there is still quite a bit of risk.
The catalyst to meaningful share price appreciation (aka getting this out of the ditch) requires a number of things to happen.
- Return Profile: The underlying assets must perform and generate free cash flow and a return on equity.
- Strategic Plan & Capital Allocation: There must be a clear plan of where the business is going in the future and what the capital allocation framework will look like. This is a business that either proceeds or the strategic review must continue. This needs to be explicity made clear to investors as we are in "no mans" land right now.
- Debt Structure: There must be a plan to build the business without piling on debt like they did in the past.
- Renewables / LCFS:They must deal with the stranded Renewables division which has little to no rationale as a separate entity.
- Management Confidence: The market must have confidence in the Management team (which it currently doesn't). This means clear guidance and achievement of targets. It also means better communication from Management.
Management needs to shape up and deliver on these items and the Board needs to use a great deal of wisdom in analyzing whether or not Management is correct in its assessment and has the horsepower to deliver.
I had initially bought into Tidewater because I believed that they had the assets were mispriced by the market but I had incorrectly assumed that Robert would be sticking around for a while. I had also thought that the strategic review (perhaps its still not complete) would have determined that much larger changes (or a series of changes) would need to be made.
This is in turnaround and will require patience. Short of a buyout, the road to meaningful returns (2x to 3x) are a ways out.
LR