Jerry, I hadn't noticed FGII before. I just took a quick look. Is it a new issue?
Options premium is probably due to very high volatility. The stock is all over the place!
Fundamentally it looks good. I think that higher day rates will encourage oil drilling companies to enlist their services. From what I have read, though, the drilling companies are less likely to produce an oversupply, which has really burnt them in the past.
I'd have to look at their competitors to really get a good look. Do you have a list?
In the drilling sector, I have looked at NE, SDC, FLC, RIG, RDC, ATW, UTI, and TDW. NE and SDC are the most compelling so far. ATW also looks nice. Are there any others I should check out?
NE is really nice. It is the most undervalued in this hot group. I think there will be a good deal of buying in this stock heading into January, since earnings will really pick up as their contracts begin to roll over. I would think that there would be some window dressing as well. My other pick is SDC. It has a good balance sheet. It's been around forever. It has a superior tax position. Also stands to benefit from higher day rates.
I'd like to know your take on this as well.
BTW, I wouldn't buy until these companies show some sort of bottoming.
Brian |
