PZ - don't sell out your Oilpatch holdings - rotate into the ones making $
.... E&P's are ''still'' Oilpatch stocks PZ (VBG). I am not saying sell; I am saying R O T A T E !!!
You make my entire point with that news byte clip; ie: ''BLOWOUT"" Rig counts... well, PZ - the writer did use the term ''BLOWOUT" - but guess what, rig count and dayrates are actually NOT ''blowing out... not even close to where they were, or where they need to be to move dayrates up. There is going to be terrible quarter, over quarter and year over year comparisons in the driller and service stocks earnings releases ! - terrible.
Every single oil analyst and even the industry itself uses RDC's CEO Palmer's number of 150 + GOM rigs needing to be back to work, before dayrates can turn upward. I'll even be flexible - at 135+ and trending solidly, week to week - I'd be buying the drillers if we were even there... but, we are NOT even close...
from SSB:
<< Offshore drilling companies are expected to report year/year EPS declines averaging 86%, and sequential declines of 33%. * Rig utilization has slumped to 74% from 78% in the first quarter, continuing to put pressure on day rates. >>
I am not saying ''short'' the OSX, or that we are going to see new bottoms - not at all. We may see the OSX 60's again, and very likely will see at least a 15% shakeout selloff imho. I'm just saying that a shakeout attempt is coming, the Street is on record on their intentions of shorting a Crude breakout over $20 and even the OSX itself coming off of the immenient poor earnings reports of Q2. The timing of this quarters earnings release into a Crude Oil breakout - will NOT be met with what most posters here are thinking... The Street will sell into strength and then short Oil's breakout. Given the bad earnings #'s - even at the very best; there is nothing to fundamentally support any major upside OSX breakout nearterm imho.
It is NOT a question of the OSX being a bad investment - it is a matter of the E&P's having the same discoutned valuations, if not even more so - but; most importantly, they have rising fundamentals and momenteum in cash flows and earnings & quarter, to quarter and year over year comparisons.
The comparison's on a fundamental and momenteum basis of the E&P's to the driller & service stocks is so gaping; that this is an individual investors anomaly dream opportunity imho.
The thought is not that the OSX will not move up through year end, it will; but rather that it will not move up to the degree of select E&P small/mid cap companies.
Also; the land drillers are priced at where they were with much, much higher earnings; the forward looking expectations are arguably near fully priced into the land drillers - there is little room for disappointment in NBR UTI PTEN etc... look at the earnings numbers on where these stocks were when they had these valuations the last time and where they are now... they are optimistically, enthusiastically and aggressively priced here imho.
.... hey, only time will tell. (VBG) ! |
