Doc - for buying drillers from here either from pullback or establishing new positions, I think it is safer to stick to the stronger companies. Your choice of DO today was a good one. Other deepwater drillers like RIG, ATW and SDC are not bad either. FGI, CAM, WFT, SLB, BHI and HAL are also the top cream in the group that are not overly burdened with debts. Today we see an across-the-board rally regardless of the type of drillers. In the initial phase of the mo-mo surge after a long period of depression, the most depressed group (the land drillers and shallow water drillers) should make big percentage gain simply due to their "cheapness" - typical recoil effect. After the initial surge is over however, as the institutions start accumulating, I expect the best companies that can best withstand future pullbacks to do better. The other advantage of buying the top creams - in the event of the highly likely post-OPEC selloff, one would have a better chance of getting out without losing too much too quickly.
I would stay away from GIFI. If they are bought out, fine. Otherwise, their fundies really suck versus others like FGI. |
