Michael -
Re: CAM
I had my finger on the trigger to start scaling out - but that conference call stopped me in my tracks. I would be very interested in your exit valuations - I was surprised to hear the mgt throw out a 1.60 - that is 14% over current estimates, and it is only the first quarter. The consensus number for 01 seems to be around 2.50 - and Solly puts peak earnings at 4.00 - 5.00, hence their 90 target. Targets are trailing stops - so he will boost as the stock moves - but an 80 handle tempts me.
I am engaged in the same debate with SII, BJS, WFT and SLB (for no reason) - if you have any thoughts on those.
td
Generic article to follow -
NEW YORK (Dow Jones)--As first-quarter earnings pour in, the outlook for oil-service stocks is brightening, sending shares higher Thursday.
On earnings conference calls, management from many oil service companies are talking more positively about the potential for earnings acceleration throughout 2000, said Lehman Brothers Inc. analyst James Crandell. Already, some of these companies, such as Cooper Cameron Corp. (CAM) and Baker Hughes Inc. (BHI), are beating estimates.
Oil-service company earnings have been in the doldrums for the past two years, as oil and gas exploration and production companies kept a tight fist on the purse strings. While shifts to highly liquid oil-service stocks have become increasingly common on days when technology stocks are down, as they were earlier Thursday, the earnings outlook was behind the latest move, said analysts. The analysts have been talking to investors who are increasingly interested in the positive trends for oil-service stocks.
First-quarter reports from exploration and production companies are showing oil and natural gas production needs to be increased, said Robert W. Baird & Co. George Gaspar. According to Gaspar, there are holes in production that the exploration and production companies have to fill.
Cooper Cameron shares ended Thursday up 5 15/16, or 8.7%, at 73 7/8, on volume of 1.4 million shares, which compares with average volume of 680,000 shares. Earlier, the stock hit a new 52-week high of 75 5/8, which compares with its prior ceiling of 71 15/16 set on April 25.
Cooper's first quarter earnings of 30 cents a share, which were released Thursday, topped First Call/Thomson Financial estimates of 22 cents a share.
Halliburton Co. (HAL) shares ended at 45 1/4, up 2 5/8, or 6.2%, on close to double average volume. Crandell upgraded Halliburton Thursday, citing the company's plans to divest its Dresser Equipment unit, which has been a drag on earnings.
The Oil Service Index was recently up 4%, but earlier the index had gained more than 6%. |
