Strictly: Drilling and oil-field services Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Wowzer who wrote (50595)	9/8/1999 12:16:00 PM
From: SliderOnTheBlack	Read Replies (2) of 95453

Rory; ie: FGI/HLX <<. Also have to believe the high short interest in FGI is from the HLX/FGI arbitrage opportunity. Is anybody short FGI for any other reason? Speak up. >> uhhh hmmmm; Sorry Rory; but the short interest in FGI is NOT from any arbitrage opportunity concerning the HLX merger - it has been around a long, long time... this was a great point of discussion some time ago. FGI's short interest is one of only two things; an insider arbitrage - that many speculate it to be & that it aint going away untill JL retires (yet to be publically proven/acknowleged - listening Drilbits ? ), or - a hedge fund(S) has literally bet its/their survival on FGI's Rig construction boom as being a one-time historic blip; never to be repeated and FGI's merger with HLX endoreses that to a degree. I hear that our own Mr. Big may address that specific issue with JL Holloway of FGI. However;I do not know if JL can publically address it ?- ask the ''Trust'' question big ? FGI has far less institutional interest than its peers - this is not by accident folks. Many believe that the large stakeholders may have hedged their sizeable insider holdings(which is legal & not required to be reported by the SEC if it is for hedging). Some companies have insiders transfer shares to a ''trust'' - the shares are no longer subject to SEC disclosure for insider transactions from that point forward. The ''trust'' can then hedge the remaining insider's holdings... Many believe FGI may be deadmoney untill JL retires... or, offshore rig construction returns (watch the backlog - period !) to what the critics view - as a historic upside blip on the chart - that is unrepeatable.... That arguement carries weight accross the entire fab sector - ie: GIFI UFAB FGI HLX etc... The one area that the Street is in consensus over - being the one specific area that Big Oil will not dramatically step up spending in - is in offshsore construction and these new deepwater rigs & drillships. Untill the backlogs turn for these fab's - virtually every other sector in the Oilpatch offers better returns imho. Witness RIG's lagging, FLC's continued depression due to their aggressive offshore rig program. In virtually every analyst review of the nearterm offshore market - there is not expected to be any dramatic upside demand for newbuilds in the offshore rig market during Boom 2000. FGI's move to acquire/merge with HLX was necessary for diversification into other market segments. Their backlog is declining rapidly and there has been a deafening silence of the lack of newbuilds for FGI - and most think there will continue to be no major upturn even thru a 2 year Oilpatch boom. There is not a shortage of offshore Rigs; witness all the litigation & cancellations - and the recent GOM lease sale in which the Majors basically did not participate spoke volumes to FGI's 18 month future. This was a biggie ! Personally; I gave up on the fab's. While FGI was a great trader, GIFI UFAB HLX & FGI are laggards for very justified reasons - and imho, they will reamain laggards. The drillers are the play, KEG is the most interesting early recovery stage play - only the dilution remains a cap to its nearterm upside here; not overpriced - but those thinking it's going to return to its former highs - with this dilution are deluded (VBG). I like FLC, RDC (speciality Jack Up niche) DO - that cash hoard still gives them all the options; and I love the transition zone service companies - also, a great early recovery stage sector - TCMS HOFF GLBL ! - these 3 benefit by the longterm upside in Nat Gas. For one pick, it would be FLC for its upside leverage - if indeed, there is a Boom 2000 - no other stock has the upside leverage to the ''Boom'' as FLC. How many 2-3 baggers (compared to former valuation multiples, or to 1 - 1/2 year highs) are left in the service & drillers at this time ? FLC has that potential... Praying for one last ''Black October'', or Y2K market meltdown opp in which to buy some FLC calls...

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next