Continuing turbulence
Shares in Gulf Marine Services (LSE: GMS) dropped 6.6% today despite strong full-year results. With revenue up 12%, the supplier of self-propelled self-elevating support vessels to the offshore oil and gas business reported a 4% rise in adjusted net profit, with adjusted earnings per share (EPS) pretty much flat. The full year dividend was lifted 9% to 1.6p per share, ahead of forecasts.
In a year in which big oil companies have been tightening their belts on support spending, this looks like a pretty decent set of figures to me, and the firm seems to have no financing problems, with a new $620m debt facility in place in the final quarter and improved borrowing margins reported.
Chief executive Duncan Anderson called this a “solid set of results“, but he did say that last year’s turbulence in the markets is expected to “continue throughout 2016” — and that’s probably partly behind the price fall. Forecasts put Gulf Marine shares on a forward P/E for 2016 of only 3.8, dropping as low as 3.2 on 2017 predictions. With EPS growth expected to resume this year, I see that as far too cheap — even if the apparent oil price recovery takes a little longer to become established.
Wafers with that?
It was full-year results time for maker of semiconductor wafer IQE (LSE: IQE) too, although the share price has remained unchanged at 18.75p at the time of writing. After a slump towards the end of 2015, the shares are now down 19% in 12 months, and again we’re looking at a company on a very low P/E valuation — just 6.6 based on forecasts.
Chief executive Drew Nelson described 2015 as bringing in “another strong financial performance“, after adjusted EPS rose 7%. The firm managed to get its net debt down by 26% to £23.2m, and saw operational cash generation rise by 41%. IQE’s intellectual property portfolio is growing, with over 100 patents now in the field of advanced semiconductor design and manufacture.
Mr Nelson also says IQE is “on track to achieve our expectations for the full year“, and as far as I can see his optimism looks to be well placed. I think we could be looking at another small cap bargain here.
Pills and potions
Finally, biotechnology specialist e-Therapeutics (LSE: ETX), whose shares gained 9% to 13.5p on the release of full-year results. CEO Professor Malcolm Young told us it was a “very productive year for our discovery platform which continues to exceed our expectations by generating high quality, potent compounds“, adding that some have “the potential to be game changers in immuno-oncology, cancer drug-resistance and anti-infection“.
That certainly sounds like a promising prospect, but the big risk I see is that e-Therapeutics still appears to be some years away from profit, with forecasts suggesting  losses continuing at around the current rate for at least two more years. For the year just ended, operating losses came to £11.6m, and I’m a little concerned that the company’s net cash of £24.8m might not last too long at that rate. However, the firm says is is “well funded to advance its programmes“, and top fund manager Neil Woodford bought some last year.