Gulf Marine Services - penny Rocket 🚀 or penny Plummet 📉At glance you might think GMS price chart suggest their in big trouble but is there light at the end of the tunnel?
Last year GMS revenue fell by 12% and their actual loss for the year totalled $85.5 million, 2019 was evidently a difficult year for them however chairman Tim Summers stated that "agreement has been reached with lenders on the key terms of restructuring our bank debt which will give GMS renewed access to liquidity and a firm financial platform to move the business forward through 2020 and beyond”
Last month GMS was awarded a six month renewable energy contract to provided support as an unnamed UK offshore renewable operator. And with Summers stating that " the company's financial performance to the end of March 2020 is slightly better than its 2020 business plan." buyers can start to have a bit more confidence.
At the end of last month Seafox applied for a takeover deal of GMS but was rejected with GMS claiming 'it has strengthened its board and secured new business' however I wouldn't write-off a future takeover.
Past price action has also shown a definite correlation between the companies stock price and the value of a barrel of oil. With that being said oil prices are currently on the up 📈 and as a result I expect CMS's share price to do the same.
Scenario 1 : The price could fall back to support after recently gaining 745% (29/04 - 04/06) and then bounce upwards from around the 6.85 level.
Scenario 2 : The price could just continue to rise in the same expectation that oil prices will
Scenario 3 : Buyer confidence could be reduced with worrying loss figures coupled with takeover doubts and the price could just continue the long term trend of further depreciation.
This is purely an idea please ensure you conduct your own analysis and ensure risk management is in place before conducting any market execution.
