Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: bw who wrote (2569)	10/29/1997 8:52:00 PM
From: Velocipher.	Read Replies (2) of 95453

First of all, the ones making the product that is in short supply will always trade at higher multiples versus the others. I would equate this for example with the trading in the semi's. FGII is like AMAT and AMAT always traded at a very high multiple. In this industry, new capacity will take alot longer than it did in the semi's to come on line. Also, even with easy entry to market in the semi's AMAT enjoyed about a three year run before capacity caught up to them. Here we are still only maybe just beginning the second year or so. Also the market will always react after it has already started, which tends to prolong the rise. As far as GLM goes they are in both deep and shallow and therefore will not get as high of a multiple as the pure play deep waters will get even with dayrates rising across the board. I don't know alot of the details with NE, something is definately going on in this stock, I agree that it looks undervalued on the surface, but the stock has not acted very well recently. Somebody has been selling fairly consistently IMO. Why? I have no idea, with the brokerage price target in the fifties this makes me wonder. Hope this helps, Greg

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