I like the angle. Looking at downsides though. The order book is looking weaker going into next year plus capacity is increasing with a new plant being built. What are the order books for competitors looking like? Is STX OSV in a strong competitive position or have competitors caught up with their premium products?
Need to get some more comfort that the fundamentals wont drop away to match the industry average.

Response:
Agree that the order book is a risk but what I’ve found is that the orders will come through (if you build it, they will come – similar to The Field of Dreams), albeit at a slower pace than previously. Looking at the past year, for 3Q2011 there were NOK5.1bn (14 vessels) of new orders on the books, STX finished off the year with NOK11.1bn (28 vessels) of new vessel orders on the books. This year the existing order book (NOK16.3bn) is at a similar level to the close of 2011 (NOK16.7bn) and it managed to find NOK8.2bn of new orders in the first 9 months. So STX is doing better than most in the current environment.

Considering the overall industry dynamics; enjoying orders that have been in discussions for a while, STX may be winning market share, or managing to stay away from the turmoil because of the nature of the vessels it produces. Check out slides 11/12 for the Eagle Shipping 3Q2012 results (http://www.eagleships.com/phoenix.zhtml?c=189576&p=irol-presentations). While the focus is on the freight market, it shows that overall new builds are decreasing but the scrapping at record levels is helping to return the balance to equilibrium. I’d expect STX would be experiencing similar dynamics because of the global macro situation.

My hypothesis is that, as long as the quality of both the vessels and management doesn’t diminish then STX will still be a leader in the field. While orders may recede in the short-medium term, STX will be better placed to weather the storm. When things begin to look up again STX will be at the front of the pack blazing ahead.
Overall, it’d be best to wait until the overhang from the potential sale is gone before looking at it on the fundamentals because any potential sale (if done at the speculated prices) would limit the upside and makes the risk / return proposition significantly less attractive.