Our case for Bumi Armada is that it is a play on the commodities sector, specifically oil. We think that this company is a good diversification tool — although a risky one — given its stock beta of 2.0. The recovery of oil price should see increasing amounts of activities within the oil and gas sector, and as such companies within the value chain such as Bumi Armada stand to benefit from it.
This offshore services provider offers a good diversification play on the commodities sector, albeit a risky one
International offshore services provider to the oil and gas industry Bumi Armada owns and operates offshore support vessels for the exploration, development and production activities in the offshore oil and gas industry. The company has two main reporting segments, which are the floating production and operations (FPO) and offshore marine services (OMS). It derives almost 90% of its revenue from the FPO segment, and is currently in the process of exiting its offshore marine services business. Under its FPO segment, the company currently operates the four wholly owned FPSOs, three jointly owned FPSOs, one liquefied natural gas floating storage unit and one partially owned FPSO under construction.
