Does this mean it could rebound strongly when the war is over? Or could there be lasting damage? Let’s see.

Who?

Just knowing the name of the company – Gulf Marine Services (LSE:GMS) – is probably enough to understand why it’s share price has fallen 26% in 14 days.

The group owns and operates 15 self-propelled self-elevating support vessels (SESV), which are used by its blue-chip customers primarily in the oil, gas, and renewable energy sectors. A typical use is the refurbishment and maintenance of offshore platforms. SSEVs are self-propelled which means they don’t require other vessels to relocate. This makes them cheaper to hire.

Is it a bargain?

Despite the recent pullback in the group’s share price, I wouldn’t say the stock’s cheap by historical standards.

During the 12 months to 30 June 2025, the group reported earnings per share of 3.1 cents (2.33p at current exchange rates). This means its shares are currently trading on 7.5 times earnings. At the end of 2024, its P/E ratio was 5.6. A year earlier, it was 4.7.

But since March 2021, the group’s share price has risen over 350%.

This coincides with a new management team taking over. Since then, the group’s managed to increase revenue, reduce its debt, and improve utilisation rates.

Significantly, the group — which was established in 1977 — has a relatively young fleet with an average age of 13 years. Typically, an SESV will have an operational life of 40 years or more. This means there’s unlikely to be a need for significant capital expenditure any time soon.

Other than geopolitical risks to its operations, other challenges include its large debt pile, which makes it vulnerable to interest rate increases. Although significant progress has been made in reducing borrowings, its 30 June 2025 balance sheet disclosed $189m (£142m) of loans. For context, the group’s current market cap is around £200m.  

Despite this, the group has ambitious plans to grow. It wants to double EBITDA (earnings before interest, tax, depreciation, and amortisation) within five years. And it plans to start returning 20%-30% of adjusted net income to shareholders via share buybacks and/or dividends.

My view

Hopefully, the war in the Middle East will end soon. And when it does, I reckon Gulf Marine Services will be able to quickly resume normal operations. At 1 September 2025, it disclosed that it had an order backlog of $474m, equivalent to nearly three years of revenue. This is unlikely to have been materially affected by anything that’s happened in recent days.

And when things do get back to normal, I reckon it’s a stock to consider. Until then, the shares could become cheaper still. Timing the bottom of the market is a mug’s game but with a company so heavily exposed to the region, it’s obvious what it’s going to take to get its share price moving in the right direction again. In the meantime, there are plenty of other UK shares that I’m keeping an eye on too.

The post Down 26% in 2 weeks and a P/E of 7.5. Is this an amazing recovery stock to consider buying? appeared first on The Motley Fool UK.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Experian

What it does: Experian provides credit services and other related financial data to businesses and individuals

By Jon Smith. Experian (LSE:EXPN) has rocketed 26% higher over the past year. The global data and technology company makes money by providing credit services and similar data to a wide range of customers.

The latest results showed that in 2023, profit before tax rose by 32% versus the previous year. Revenue grew by 8%, with guidance that this should grow by the same amount in the following year. 

It flagged up that the global economic recovery should help to grow demand further in the coming couple of years. I agree with this, as consumers are going to be more focused on their personal finances to ensure they can survive another potential cost-of-living crisis.

I do note that the firm will need to diversify into other offerings further down the line. Otherwise, there’s a limit on how big it can get right now, which is a risk.

Jon Smith doesn’t own shares in any firm mentioned.

Gulf Marine Services

What it does: the firm operates self-propelled and self-elevating support vessels (SESVs) serving the oil, gas and renewables sectors.

By Kevin Godbold. There’s been a pullback in the Gulf Marine Services (LSE: GMS) share price. The pause is welcome and has stopped the valuation running ahead of events.

This stock comes with risks, of course. The company’s fleet is run from offices in United Arab Emirates, Saudi Arabia and Qatar and serves international markets. However, one of the concerns is the big pile of debt on the balance sheet.

That had combined with the cyclicality in the industry to cause trouble for the business and the share price.

Much of the recent progress has been due to the cyclical recovery of operations and moves to reduce the level of borrowings. But with the share price near 19p (24 June), the value and quality indicators remain attractive, and positive news flow keeps on coming.

I’m optimistic about the outlook for the industry and think it’s worth focusing on this stock for July onwards.

Kevin Godbold owns shares in Gulf Marine Services.

Raspberry Pi

What it does: Raspberry Pi makes tiny little computers, that run Linux and can be programmed to control all sorts of things.

By Alan Oscroft. Yep, I’m going for it. I’m tagging Raspberry Pi (LSE: RPI) as my top UK growth pick.

It’s had a mixed ride since trading opened on 14 June, so it’s hard to get a feel for market sentiment yet.

And valuations are tricky, with a price-to-earnings (P/E) ratio of around 30 based on last year’s earnings. I don’t think that’s too high for a tech growth stock, though we don’t know how it might translate into a forecast P/E.

P/E valuations often don’t mean much in a tech growth industry anyway. The growth here is from AI and robotics, which are closely intertwined.

I also don’t know what market share the firm might grab for robotics control computers. So, lots of unknowns here, each its own risk.

But the sheer potential size of the AI market in the coming decades means I might buy some Raspberry Pi shares.

Alan Oscroft has no position in Raspberry Pi.

The post Best British growth stocks to buy in July appeared first on The Motley Fool UK.

Here, I’m going to take a look at two penny shares that are flying right now, Rainbow Rare Earths (LSE: RBW) and Gulf Marine Services (LSE: GMS). Should I buy these growth stocks for my portfolio?

A renewable energy play

Rainbow Rare Earths is a small mining company focused on producing rare earth oxides to drive the green energy transition. Its projects include the Phalaborwa Project in South Africa and the Gakara Project in Burundi. Trading for around 13p, it currently has a market-cap of about £80m.

Now, I can certainly see some reasons to be bullish here. Rainbow’s two key products are both rich in the four most economically important rare earths – neodymium and praseodymium (NdPr), dysprosium (Dy), and terbium (Tb). These are crucial inputs in electric vehicles, renewable energy technologies (eg wind turbines), smart phones, and robotics.

Meanwhile, the company has signed some big deals lately. Last month, for example, it entered into a Memorandum of Understanding (MoU) with potash giant The Mosaic Company to conduct a preliminary economic assessment on extraction of rare earths from a phosphogypsum stack in Brazil.

Ultimately though, this stock is just a bit too speculative for me. At present, the company has minimal revenues and no profits. And it looks like it only has enough cash to last until 2024, meaning it may have to raise capital at some point in the near future (which could negatively impact the share price).

So I won’t be buying the shares for now.

Significantly undervalued?

Turning to Gulf Marine Services it operates a modern fleet of liftboats (self-propelled, self-elevating vessels that are used in various offshore exploration and production activities) used across the oil & gas, renewables, and platform maintenance industries. It currently trades for around 8.5p and has a market-cap of approximately £86m.

There are a number of things to like about GMS, in my view. For starters, it’s profitable. This year, the company is expected to generate earnings per share of 1.6 cents on revenues of $142m.

Secondly, it recently said market demand for its services remains strong. It noted that it started 2023 with a backlog ‘not seen for many years’ ($369m).

Third, the company is aggressively paying down debt in an effort to strengthen its balance sheet. It also recently announced a decrease in finance charges.

Now, this stock does look quite interesting from a value perspective. If the earnings forecast above is accurate (and it may not be), this company could be undervalued.

At its current share price, GMS has a forward-looking price-to-earnings (P/E) ratio of less than seven. That’s about half the UK market average.

One thing that puts me off here however, is the fact that leverage is still quite high. At the end of 2022, net debt stood at $315.9m. In a world of higher interest rates, this adds risk.

In light of this large debt pile, I think there are better (and safer) growth stocks to buy today.

The post Should I buy high-flying penny stocks Rainbow Rare Earths and Gulf Marine Services? appeared first on The Motley Fool UK.

However, this energy sector business has suffered serious problems in the past and could do so again. For this reason, I’d only consider allocating a small part of my portfolio to this stock.

The company in question is rig operator Gulf Marine Services (LSE:GMS). This small-cap stock is based in the UAE and operates a fleet of modern jack-up platforms. These offshore support vessels have retractable legs that can be lowered to the seabed to create a stable platform for drilling and other engineering work.

The right time to buy?

The group has historically focused on serving the needs of national oil and gas companies in the Middle East, but it’s diversifying into renewable energy and other geographic markets.

I avoided this penny stock for a long time because it had serious debt problems. Shares in the group are worth 80% less than they were five years ago, but a refinancing has helped to put the business on a sustainable foorting. I think there’s now a good chance that a sustainable turnaround is underway.

Strong prices for oil and gas mean demand for Gulf Marine’s fleet is strengthening. I think it could be the right time to buy. As I’ll explain, the shares could still be very cheap.

Why I think GMS is cheap

During the first half of 2022, 89% of Gulf Marine’s fleet was on hire, compared to 77% during the first half of 2021. The average daily rental rate also rose, from $25.5k to $27.2k. This improved operational performance saw revenue rise by 30% to $66m for the half year. Operating profit for the period almost doubled, rising from $11m to $21m.

Importantly, net debt is expected to fall from $371m to $319m this year. That tells me Gulf Marine is now generating more cash than it needs to operate — a big win.

However, this improved trading performance hasn’t lifted the share price, which has been broadly flat this year. That’s left the stock trading on a forward price-to-earnings ratio of just 2.5.

At around 6p, the shares are also trading at a discount of nearly 75% to their last-reported book value of 22p.

What I’d do now

These valuation measures look very cheap by conventional standards. I think that reflects the risk investors still face from the group’s elevated debt load. If profits dip and repayments become difficult, the shares could still collapse again.

However, Gulf Marine appears to be making good progress so far. Broker forecasts suggest the group’s profits will continue to rise in 2023. Given the state of the energy markets worldwide, that seems realistic enough to me.

If GMS shares doubled to 12p, they’d still only be trading on four times 2023 forecast earnings. If I had spare cash to invest in the speculative part of my portfolio today, I would definitely consider buying Gulf Marine shares.

The post I’d buy this penny stock to try and double my money appeared first on The Motley Fool UK.