Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: RBlatch who wrote (49930)	8/26/1999 3:01:00 PM
From: SliderOnTheBlack	Read Replies (3) of 95453

RRC -this doesn't need me - this is a STRONG FUNDAMENTAL BUY on ANY metric I honestly hope others will share the wealth here folks - EVERYTHING I have learned by eating, sleeping, drinking & breathing the Oilpatch exclusively for the last 18 months is personified by this play. This is a chance for the little guy to make a major short term home run. The companies strategy is well defined - the company has not only delivered - they are ahead of schedule in deleveraging. Management is communicative - and they are executing the gameplan perfectly. The CEO has also - put his ass personally on the line - virtually guaranteeing that the corner not only ''will'' be turned in Q3 - but that it ''IS" being turned all ready... I place RRC's & XTO's mgmt at the top of the list fwiw... While their under-the market hedging is a partial reason for the softness here; it conversely presents the huge upside potential as virtualy no other company will show the degree of upside to realized nat gas prices in Q4 onward... their qtr over qtr & year over year upside will lead to upside surprises to analyst estimates - heartilly beating estimates; leading to analyst upgrades and raised price targets - all which lead to increased shareprices... the cold, hard mathematical fundamentals of this company so overwhelmingly support a Strong Buy - that there is virtually no close 2nd place choice imo. By virtually ANY valuation metric chosen - be it cfps multiples - on a sector historic basis, on its own historic multiple basis, or in relationship to its sector peers - this is vastly undervalued. Using EBITD,NAV multiples, 2000 earnings PE's etc, - this stock at sub $6 is a mispriced anomaly. The shorting to hedge the JV play are the reason for the strong re-trace here. Anytime the individual investor can sieze a window of opportunity presented by the Street in situations like this - buy & buy big... these are the opportunities that I look for... this is a literal gift - especially in light of its recent valuation at $7 mere weeks ago. That 50% upside in this stage of the Natural Gas cycle is another ''anomaly'' - this is a gift. The Street does not present nearterm, supported 50% upside plays like this very often... Range has the fundamentals to support a valuation over $8 right here, right now. It has the technicals - especially given the hedging nature of the short position - to support a 50% nearterm upside. That is HUGE folks ! FIFTY PERECENT ! Over -weighting to RRC here can give us the return potential in weeks, to where we otherwise would have to buy & hold the OSX untill Q2 2000 perhaps.... This short term play - which is really a classic longterm hold (given the 13 yr resv. life/east coast leverage/ huge qtr over qtr & yr over yr improvements when the underwater hedges come off etc.) that is as much of a no - brainer as any Oilpatch play can be... Also; I have done more homework on this company than any other I have ever researched. I have loved & hated Deutsche Bank - they are the most conservative Energy House in the business. Wes Matt was the most bearish on the OSX companies and was the last guy to turn Bullish. Deutsche's Oil & Gas E&P analysts as well are as conservative as they come - when ''they'' pounded the table without hesitation; and when ''they'' took the lead immediately raising their price target to $10 off the JV announcement - it got my attention; and it should get yours too ! Get the Deutsche report from Multex: multex.multexinvestor.com 1.5 x 2000 cfps 63% of NAV PE of 5 x 2000 est earnings 5 x Enterprise Value/2000 E EBITD multiple .... just do it

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