MIND MIND Technology Inc

The energy service companies are sitting pretty. Mitcham Industries, Inc. (MIND) is expected to grow its fiscal 2012 earnings by 312% as customer demand remains strong. This Zacks #1 Rank (strong buy) is also a value stock, with a forward P/E of just 9.2.

Mitcham supplies rental or new seismic equipment to the oil and gas industry, seismic contractors, government agencies and universities. It also manufactures specialized seismic marine equipment through its Seamap brand.

A global company headquartered in Texas, it has sales and service offices in Canada, Australia, Singapore, Russia, Peru, Colombia, and the United Kingdom.

On Oct 6, the company announced a new warehouse, logistics and repair facility in Budapest, Hungary which it believes will tap into the capital spending on oil and gas exploration in Eastern Europe.

Revenue Soared 40% in Fiscal Q2

On Sep 7, Mitcham reported its fiscal second quarter results and saw sales climb 40% to $21.3 million from $15.2 million a year ago.

It also surprised on the Zacks Consensus Estimate by 10%. Earnings per share were 11 cents compared with the consensus of 10 cents.

It was the best second quarter ever for core leasing revenue, which jumped 89% to $12.3 million. This was due to stronger customer demand and increased utilization in Latin America where increased equipment was deployed in the first half of the year.

The company also saw increased activity from European customers for jobs in both Europe and North Africa and steady activity in the United States.

The Seamap segment also saw strong demand and is seeing considerable after-market business, including in parts sales, training, service and repair work.

In the first half of the year, Mitcham purchased an additional $35 million in new equipment to meet growing demand. It expects total capital expenditures in fiscal 2012 to reach $65 to $70 million.

The company did a follow-on offering in June which gave it $31 million which was used to fund the expansion. It is focusing the new equipment on South America, Europe and the marine segment leasing business.

Massive Earnings Growth in Fiscal 2012

Since the second quarter earnings report on Sep 7, the analysts have revised their full year estimates higher for both fiscal 2012 and fiscal 2013.

The fiscal 2012 Zacks Consensus jumped to $1.40 from $1.20 in the last 60 days. That is earnings growth of 312% as the company only make 34 cents last year.

But the growth is expected to continue into fiscal 2013. The 2013 Zacks Consensus Estimate rose to $2.01 from $1.83 which is another 43% EPS growth.

Growth and Value

Like a lot of stocks, Mitcham saw a sharp sell off in its shares over the summer which has made it even more attractive.

In addition to a P/E of only 9.2, which is well under its peers which average 16.4x, Mitcham has a price-to-book ratio of 1.1. A P/B ratio under 3.0 usually indicates value.

With no signs of a slowdown in the oil and gas industries, Mitcham is an attractive combination of both growth and value.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at twitter.com/traceyryniec.

 
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