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Strategies & Market Trends : Value Investing
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To: Keith J who wrote (24705)8/24/2006 3:35:09 PM
From: Paul Senior  Read Replies (4) of 78748
 
Keith Jamison, I've been considering adding to my small ESV position. This based on forward p/e multiple. It's been a cyclical industry, and while I'm willing to bet the down part of the business cycle will at least be postponed for a while, I might be very wrong that the forward p/e (6.2) is actually relevant. (The time to buy being when earnings are nonexistent)

Also, I'm just not familiar enough with the jackup business to evaluate ESV properly. That hasn't stopped me from taking on a few shares though as part of a package. However, my strategy for oil/gas stocks has been to add more on scale up, and that's not worked for me with some companies like ESV. (Have '04 shares in $30's and 4/'06 shares in $50's, for an overall net loss with stock now selling in $40's.)

I see on my screen that several others have low p/e's too, and I have considered adding to these also:

PTEN: 6.0
RDC: 6.1
ESV: 6.2
GW: 6.6
NSS: 7.0
UNT: 7.0

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About that "several others have low p/e's" phrase above: that's the worrisome part for me. It's that the many others DON'T have such low forward p/e's and I don't know why there's that discrepancy. (Different businesses sure, but could the market be anticipating none of these six specific companies above are going to do that well in '06-'08? I don't know.)
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