FGH in Review
Some History & Recent significant events that have moved the stock:
1999 - From the 52 week high of 20 1/8 reached on Apr 29, 1999, Friede Goldman Halter, Inc closed out the year at 6 15/16 on above average volume, culminating (after 2 months of heavy tax selling) in a 65.5% decline from its previous high for the year. Two events which stand out for the year were the merger and the Ocean Rig dispute which have been covered adnauseum and will not be repeated here. bigcharts.com
Jan 3 - Jan 7, 2000 During the first week of the new year, the stock was in the process of recovering from the tax selling of the previous two months, hitting an intraday high of 8 1/8 on Friday. Moderate Profit taking commenced
(as expected) following the rapid run-up; but, turned into a rout compelled by the following events.
Jan 12, 2000 Warning of 4th quarter losses
GULFPORT, Miss. (CBS.MW) -- Shares of Friede Goldman Halter took a 22 percent dive Wednesday after the oil services company warned it would report a loss for fourth quarter 1999 because of problems with four of its construction contracts. The stock fell 1 11/16 to close at 5 7/8.
URL: cbs.marketwatch.com
Comment: Following the Headlines, an emotional sell off (panic??) continued the following two days carrying the stock to its all time (intraday) LOW of 4 7/8 on Jan 13th, representing a 40% FALL from the previous Friday's high.
bigcharts.com
A technical rebound was likely aborted by the announced lay offs at the Pascagoula, Miss., Shipyard.
"FRIDAY, JANUARY 14, 2000 1:50 PM
Pascagoula, Miss., Shipyard Layoffs Stun Workers By Karen Nelson, The Sun Herald, Biloxi, Miss. Knight Ridder/Tribune Business News Jan. 14--PASCAGOULA, Miss >words omitted< The company has laid off a total of 1,200 in one week at the Pascagoula yard, blaming its financial problems on contract disputes with two companies that have hired Friede Goldman to build four drilling rigs. The layoffs swamped the local employment offices and left hundreds of craftsmen scrambling for work. - Unkonwn (sc)"
Jan 19, 2000 Settlement of Ocean Rig Dispute
GULFPORT, Miss.--(BUSINESS WIRE)--Jan. 19, 2000--Friede Goldman Halter, Inc. (NYSE: FGH - news) and Ocean Rig ASA today announced that they have settled disputes related to the construction and delivery of Ocean Rig's Bingo 9000-1 and Bingo 9000-2 offshore drilling rigs which are currently being outfitted at Friede Goldman Offshore's Pascagoula facility. The settlement terminates the previously announced arbitration proceedings in which both companies were engaged. URL: biz.yahoo.com
Comment: The stock began a modest recovery on Jan 18th and intensified on the following day with news of the Ocean Rig Settlement. bigcharts.com
Following the 4 day euphoric rally of 67% from trough (4 7/8) to peak (8/18), the price and activity settled down in the 6 area:
bigcharts.com
UNTIL:
Feb 22, 2000 Release of Estimates of 4th quarter losses
The Company has revised its estimates to complete the Ocean Rig contract and now expects to report a net loss for its fourth quarter of between $38 million and $40 million, or $1.10 to $1.16 per share.
URL: biz.yahoo.com
Comment: Since announcement of estimated 4th quarter losses the issue has demonstrated continued volatility; but, the TREND has been UP with increasingly higher volume; perhaps proving, once again, that BAD news is often better for stock performance than NO news.
SUPPORT & RESISTANCE:
Investors should note the average prices at which a stock traded over the past 50- and 200-day periods. These "moving averages" tend to provide a floor, or support, for stocks trading above them and a ceiling, or resistance, for stocks trading below them. Stocks that sink below support are in danger of further weakening; stocks that rise above resistance have a shot at new highs.
A/O Close 3/3/00:
Friede Goldman Halter current price: $6.75
First support for Friede Goldman Halter: $6.36 (50-day moving average)
First resistance for Friede Goldman Halter: $10.18 (200-day moving average)
FGH traded 491400 shares
FGH has an Average Volume of 378000, (50 day moving average of daily volume)
FGH had a Volume increase of 30% from its 50 day moving average volume.
COMMENT: While I find the CLOSE above the 50DMA encouraging, I place more confidence in
CROSSOVERs of Moving Averages. For trading purposes AND for possible Core accumulations and distributions, I often construct a shorter term Moving Averages (10 days for example) and employ the Crossover as a BUY signal on the Upside and just the reverse on the Downside. The 10 day Moving average for FGH as of yesterdays close is 5.75. IF FGH continues to CLOSE above the 50DMA (SUPPORT of 6.36, currently) at some undetermined time in the NEAR future, the 10DMA will CROSSOVER THE 50DMA. I will regard that event as a technically MORE positive than a temporary penetration of same. Having sold my remaining Energy related shares on Thursday (3/2/00), I have placed myself in CASH position to act decisively IF this Short Term Technical Indicator is triggered AND/OR on "breaking" favorable news . Technical considerations notwithstanding, I'll NOT likely make ANY significant moves until the 8K (annual report) is received, studied and understood.
Mr. Holloway has stated: ?The Company believes, based upon current estimates, that all of the earnings impact of unprofitable contracts as well as merger-related expenses have been provided for in the quarter. >words omitted<
The Company anticipates significantly improved financial results for the current year.? marketwatch.newsalert.com
Comment: In making those statements Mr. Holloway has placed his own personal reputation and his companies credibility ON THE LINE. Let's all hope neither he nor we suffer any further disappointments!
Good Luck
SargeK
P.S. I find it interesting that there is NOT a SPIT of difference between present technical support @ $6.36 and Estimated Book Value of $6.25. Perhaps investors ARE beginning to look at fundamentals, again! |
