Heyward - I think that all the longs still feel that this sector is, by and large, fairly valued to undervalued. If you look at post #3128, you'll see multiple companies with PEs below 20 against estimated 98 earnings. Although not shown on this chart, most of those estimated earnings represent increases over 97 earnings of 40% or more (RDC - 47%, Noble - 90%, CDG - 48%, DO - 64%, PTEN - 70+%)
and of course all those PEs were calculated yesterday, so those PEs are getting smaller all the time.As for FGII, there is a $3.15 estimate out there on their earnings on 99, I believe, and many feel that they have some upside surprises.
Many of these drillers also have 99 estimates that show considerable more upside-for example NE is suppose to make $3.00 in 99, a 50% increase after their 90% increase in 98. It also seems to me that these estimates are a lot more of a "sure thing" than those in other sectors. Seen any earnings downgrades lately? Again, I refer you to post #3128.
If you can show me some stocks that have better 98 PEs relative to their growth prospects for 98 and 99, I would sincerely be interested in learning about them. I can think of maybe one - ECGOF.
Remember, 3 months from now we all will be saying " Should have bought some/more XXX during that November selloff".IMO,earnings still drive stocks in the long haul.What sector has better prospects with these value levels? |
