MMA Offshore Ltd: Why buying this stock could be your chance to beat the professional investors

The share price of MMA Offshore Ltd (ASX:MRM) has taken a beating which could offer an enticing entry point for savvy investors.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investing is a serious pursuit and arguably one of the advantages a professional investor has over a part-time investor is simply more hours in the day dedicated to identifying, researching and analysing investment opportunities.

One listed investment company (LIC) with an incredibly successful track record at adding value for shareholders is Argo Investments Limited (ASX: ARG). Argo is one of the largest LICs on the ASX with a market capitalisation of $5.1 billion and a portfolio weighted towards blue-chip stocks.

Indeed of the seven companies Argo spent over $10 million investing in during FY 2014, six of them were all very large with a market capitalisation of around $10 billion or more. They were three banks, Telstra Corporation Ltd (ASX: TLS), Sydney Airport Limited (ASX: SYD) and Transurban Group (ASX: TCL).

Although Argo is skewed towards larger companies it also owns a number of smaller companies too. In FY 2014 the seventh company which it invested over $10 million of its cash in was MMA Offshore Ltd (ASX: MRM) – formerly known as Mermaid Marine Australia.

Unlike the other six stocks which are all trading at higher levels than they were in June 2013, in contrast MMA's share price is around 65% lower. As a major provider of marine logistics and supply base services to the oil and gas sector, this stock is obviously not in a popular sector at present. In fact, ever since the company announced a very large, 'transformational' acquisition which was well supported by many fund managers the share price has been slipping.

Foresight and perfect timing

With the benefit of hindsight, building the perfect portfolio would be relatively straightforward. While we can't expect to have perfect foresight and timing, by approaching investing as a long-term pursuit, investors expose themselves to the opportunity to buy at great prices. While many of the professionals may have purchased MMA in the past 18 months at much higher prices, investors looking at the company with a fresh pair of eyes today may ultimately do much better.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.  

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »