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Strategies & Market Trends : Joe Stocks Trader Talk

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To: Joe Stocks who started this subject	2/22/2002 5:08:50 PM
From: Joe Stocks	Read Replies (1) of 787

OSX- This from Sharon over at AOL. Great ideas. Subject: Oil and Gas Date: 2/22/2002 1:58 PM Central Standard Time From: Sharon1555 Message-id: <20020222145811.07506.00000023@mb-ce.aol.com> Now is the time I start to watch the group for entry positions for longer term and want to pick bottoms or as close to that as possible. APC ... unfortunately it has been up in price this past month so I wouldn't buy now. Buy target in the range of 40 to 43. The company will probably have to go to the capital markets to help fund its projected $2 billion budget for 2002; it will probably only generate $1.5 million in cash flow and will have to borrow $500 million. That should cause the stock to drop but they do have a strong capital structure and interest rates are low. They have been under pressure because of the Enron problems and they recently announced a "second" write-down from $4.33 a share to $1.93 a share. This set back is temporary and the write-down will benefit the bottom line later. According to VL, they have an appreciation potential from a low of 45% to a high of 115%. Their revenues are expected to be around 20% over the next 3 years and their earnings will increase as the demand for oil and gas picks up. When I crunch numbers I get a severe market low of $27. APA -- Is in good shape but will have an earnings fall because of lower natural gas prices. They are expanding their international operations in Australia and Egypt and both areas have shown increased output and that should help revenues in 2002. I am looking at a buy target in the 34 to 40 range. It too has risen all of February so far and I wouldn't be a buyer at $50. They will have lower earnings in 2002. However, when the cycle starts picking up, they have an appreciation potential from a low of 45% to a high 110%. Number crunching yields a severe market low of $24. PXD -- Same story, is in good shape, but will have an earnings fall because of natural gas prices. It has cut expenses in response to lower gas prices but their total volume output should actually increase by 15% when Canyon Express pipeline comes on line in July. They have excellent prospects for output growth in 2003 and have 3 major projects which will up their output by 60% next year. When gas prices recover because drilling rig counts are down and will lower supply later this year, PXD will probably be one of the largest producers in the country. VL puts the price appreciation potential from a low of 65% to a high of 150%. I have a buy target in the range of 12 to 14; and a severe market low of 10. Just a brief note on a few others I am watching for entry: DO -- price appreciation potential from a low of 80% to a high of 170%. Buy target $23. Severe market low $20. ESV -- price appreciation potential from a low of 50% to a high of 115%. Buy target 13. Severe market low $9. GLBL -- price appreciation potential from a low of 90% to a high of 215%. Buy target $8. Severe market low $4.6. GSF -- price appreciation potential from a low of 90% to a high of 185%. Buy target $22. Severe market low $ 18. NBR -- price appreciation potential from a low of 85% to a high of 175%. Buy target $28. Severe market low $18. PKD -- price appreciation potential from a low of 90% to a high of 200%. Buy target $3.60 to $3.80. Severe market low $2.80. PGO -- price appreciation potential from a low of 175% to a high of 325%. buy target $5.00. Severe market low $5.00. RIG -- price appreciation potential from a low of 80% to a high of 170%. Buy target $23 to $26. Severe market low $23. WFT -- price appreciation potential from a low of 60% to a high of 135%. Buy target $23. Severe market low $16. I like to get the drillers at lows and ahead of everyone else. None of these will have outstanding earnings this year. But I would watch for long term bargain basement prices and tuck them away for big returns. I think the appreciation potentials are probably conservative when the economy and world conditions improve and demand increases for oil and gas. I would NOT buy right now because most of these have run up on the fluctuation of oil and gas prices along with uncertain issues with the Russian output. It is a trap here unless you are nimble enough to get in and out quickly. Sharon Do your own due diligence before making any investment decision.

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