well here we are

As previously posted I thought that NMS would drop significantly from my selling price (74c I think) due to the massive earnings downgrade for the half. Originally I said I would revisit at 45c, but we have overshot that with a loss for the half, plus the global worries of late. Well as predicted its happened so lets have an objective and analytical look (I just lost Cujo) at the situation at hand.

Firstly I have read multiple posts as the share price drops such as:

* Its going to be a billion dollar company
* I'm loading up the truck if it hits the 30's
* What a bargain (again and again as it drops further)
* I'm only selling when I want to go on a round the world trip and of course the "old 5 bagger for sure" some 25c back

However, the majority of these posts provide no justification or back up to there reasoning.

Four aspects I look at are as follows:

The General Market - Has fallen nearly 10% of late and is looking very shaky if 4500 breaks. If the market falls NMS falls. If 4500 holds, plus DOW 10,000 next couple of months should be positive. Prognosis - Neutral at this stage.

Sector - Several downgrades coming through in the sector plus its become apparent that the GFC had a lag for oil and gas service companies. Traders and maybe investors probably not looking at this sector currently. Prognosis - Negative.

Chart - Chart shows a horrendous downtrend. Prognosis - Negative.

Fundamentals - First half NMS is losing money, second half prediction prediction by Euroz is $9.4m, so FY 10 is a profit of $8.4m. So things certainly on the improve with vessels at work and more contracts seeping through. Much of the decline is being attributed to the GFC, but the strong aussie dollar is having a major negative influence as well. At a market cap of $175m pe is 20. Prognosis - For me a pe of 20 (given the uncertainty) is still too high
so thats a negative for me as well.

Summary - My current thoughts are there simply isn't an compelling reason to buy NMS at this stage. Its no longer a growth story, but a turnaround story and I probably don't have the skills to pick a bottom. Given the factors below it certainly could fall alot further from here.

However, if it did fall further with the very real possibility of Gorgon work and a bounce back in profitability it may well start to look appealing. I can't predict this so im sticking with what I know at the current time.