Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: It could have been worse. In fact, it was. When Hornbeck Offshore Services
So what: Management blamed the difficulty of obtaining drilling permits in the Gulf of Mexico for its inability to earn a profit in Q1. (By the way -- thanks a lot, BP
Now what: And things could get worse before they get better. With the stock selling for 19 times earnings at last report, you'd ordinarily want to see analysts projecting something like 19% compound annual earnings growth before entering the stock. Analysts are, in fact, expecting to see a double-digit change. Problem is, the change they expect is negative -- an 18% annual shrinkage in profits. For five straight years.
Now do you understand why investors are fleeing? With prospects like these, it may be quite some time before they come back to Hornbeck.
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