Judd Arnold from Lake Cornelia Research Management on Offshore and Tidewater $TDW
Yet Another Value Podcast
Tidewater in the Offshore Space in General
Tidewater is a company that has gone bankrupt at least once, maybe twice in the past five years. The energy sector was thought to be dead for seven or eight years but it's alive and well now. Convex energy investing is all about convexity because you need to create really interesting risk rewards. Tidewater will see new builds like a 60 $70 million operation for an OSB drilling rigs deepwater rigs are now in billion dollar assets.
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Speaker 3
Didn't you already add pickled onion? Yeah, I want crispy and crazy. I've totally done that,
Speaker 2
I'm like, I'm like, I'm I'm like, I'm like, like, I'm like, I'm Onion is top tier for me, potato's a top tier for me. I know that you want, I don't know if I can give it, I don't know if I can get into the golden plate. I'm trying to get myself there. But to me, it just doesn't cut it. Wow. I think it's 3.754.
Speaker 1
So I think it's- You're not even gonna get an extra time to get it up to four, to get up to the bare minimum threshold to get up on the elevated bed? You know what? My two friends like it a lot. I'll give it four forks. Wow. Four salad forks. Four salad forks, which means it gets a big green thumbs up collectively. No. And ends up... I will not give it the big green thumbs up. You're giving it a green thumbs down despite giving it four salad forks?
Speaker 2
No, I stay this way. I stay in the middle. Wow. Yeah. What happens to a gladiator if you give them the one in the middle? I don't know. I think they bring out the duel of fates chair. We'll find out in gladiator two. Maybe there is a there. Maybe a middle maybe there's a middle thumb. It's
Speaker 3
like just right at. I don't know. Right at three o'clock.
Speaker 2
It seems like that like the Emperor or whatever is like kind of like not is it Emperor. I have no idea. I'd be an Emperor. I'm
Speaker 3
sure whoever it is. Caesar. There we go.
Speaker 1
Caesar. Yeah. He's unsure of to do. Yeah. Well, that also gives you a fun bit too. You could be as the emperor. He's like, whoa, whoa, whoa, whoa, whoa. You kind of react into the crowd playing it up a little bit. You don't put the land on the thumbs up. Is that not what Joaquin did? He does, he does egg him on a little bit. I don't know if he goes, whoa. Whoa. I can't control this crazy thing. Whoa. All right. And
Speaker 3
he made out with his sister. I think that's more. That's true. He did more than that.
Speaker 1
Yeah. Yeah, they were going
Speaker 3
all the way. This used to be a society. You know what? I will give it a green thumbs up. It gets real close. Wow. Wow, welcome to the Elevator Daddy. I'm gonna remember this when I'm ruling the world. In the apocalypse. I'm gonna remember this. That
Speaker 1
was our review of Sweet Potatoes. Casey, how do you feel about Sweet Potatoes? You're a Sweet Potato fan? I like Sweet Potatoes. I'd go four. You'd go four, yeah. Yeah. And Emilia, you're just coming back with what we got for our segment, but where would you land on Sweet Potatoes? Jesus.
Speaker 2
I don't think about them. Okay.
Speaker 1
You don't think about them. Yeah,
Speaker 2
I can't. They just don't enter your head. Yeah, I can't give a score in good conscience, I just. How
Speaker 1
often do you lead a sweet potato? She's abstaining.
Speaker 2
It'd be like a few times a year. Okay. But I don't consciously think about it, it's kinda like religion. I don't really think about or anything.
Speaker 1
Right. Yeah. What
Speaker 2
the hell? So you're
Speaker 1
comparing sweet
Speaker 3
potatoes to God. Yeah, just
Speaker 2
so I don't have an opinion. I love it. I love it. I don't think about it. It doesn't come up much. Yeah. Yeah. Okay. So I abstain. Let her deliver. Get into the segment. I feel bad that she's holding Yeah, you've got your arm full of stuff. Sorry. You didn't need to take your position. I didn't talk about God while she's holding all
Speaker 3
this shit. We don't
Speaker 1
talk about God much on this podcast. It is a Christian podcast. It is
Speaker 2
a Christian podcast.
Speaker 1
We should talk about it a little bit more. We should. We should
Speaker 3
more. I talked about microplastics and
Speaker 2
cum. You did talk about that, yeah. The new God. The new God. Your
Speaker 3
Lego baby, that's the new god.
Speaker 2
What the fuck is going on here, by the way? So Emilia,
Speaker 1
for audio listeners, Emilia has a selection of various, I think these are all sweet potato chips, or sweet potato adjacent. So we have some sweet potato chips, and then we also have some sweet potato beverages. These look to be some eat some v8 varietals. So I guess we're gonna have some some sips of these. Do you what is your juice intake?
Judd Arnold discusses how the offshore place is at an inflection point and why he thinks Tidewater (TDW) is the best way to lay it.
Judd's initial piece on TDW: https://drive.google.com/file/d/1cKYzHg62bamDQa620NZcmn_af0A0xTfT/view
Judd's TDW space: https://twitter.com/CorneliaLake/status/1600172923355922434?s=20&t=_Q2xMKdTTh1Lhlp-HeRD3w
Chapters
- 0:00 Intro
- 2:30 What's interesting about offshore right now?
- 5:50 Comparing today's cycle to 2012-2014
- 10:00 TDW's replacement cost and why new build isn't starting any time soon
- 18:30 Why increasing utilization can quickly spike day rates
- 21:00 Discussing capital returns if we do see a day rate spike
- 25:20 Why focus on TDW versus the other offshore players?
- 30:30 What breaks the offshore cycle?
- 36:10 Offshore as a snowball running down the hill
- 39:30 How regulatory uncertainty impacts terminal value and potential new build dynamics
- 42:40 Discussing TDW's acquisition strategy
- 46:40 Given the cyclicality here, how do you value offshore?
- 54:40 Haven't the stocks already run?
- 59:30 What could accelerate the cycle?
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