Gulf Island Fabrication, Inc. is a leading fabricator of complex offshore steel structures, marine vessels and onshore petrochemical and industrial facility components. The steep decline in the price of oil that began in mid-2014, and the associated reduction in capital expenditures by offshore oil and gas producers, has forced Gulf Island to transition its business away from its traditional core oil-and-gas-associated operations. This process is well underway and there are positive signs of success in the company’s pivot. However, cost overruns and contract disputes with legacy customers have proven materially detrimental to the company’s financial condition. Recent operating results and poor project execution have given rise to serious concerns about short-term liquidity. Global Value Research Company (GVRC) believes that the company’s sock has been disproportionately discounted, and that the factors explaining this discounting are transient. GVRC therefore initiates coverage with a buy rating and a target price of $18.15.