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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Roebear who wrote (50634)9/8/1999 5:51:00 PM
From: upanddown  Read Replies (3) of 95453
 
Roebear

Another question to consider with FGI/HLX is relative value. The combined company, at todays prices, will sell for approx 30% of TTM sales and FGI, while they may be reducing backlog, had very impressive revenue growth in the first six months of 1999. Many of the E&P's and drillers mentioned here are already selling for at least 2 years sales and many are at 5-7 years sales (ex. APA APC EOG BR). In my opinion, that is rather high for highly cyclical companies. A reading of the numbers indicates to me that FGI/HLX has had far more consistent revenue and earnings growth than sector companies selling at 10 times their price/sales ratio. The combined company will be much more diversified than doing newbuilds. Remember that HLX has almost twice the TTM sales of FGI. JMO.

John
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