SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Gold/Mining/Energy : Strictly: Drilling and oil-field services
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Alias Shrugged who wrote (5127)12/15/1997 2:25:00 AM
From: Czechsinthemail  Read Replies (3) of 95453
 
Mike,

I think the best explanation for the bad times in this sector recently is nervous profit-taking accelerated by fears that drilling will be cut back due to a combination of OPEC overproduction and Asian underconsumption. Selling has accelerated as oil prices have dropped. Unless oil prices continue to drop to significantly lower levels, the expected link between falling oil prices and cutbacks in oil drilling budgets will not pan out. Virtually all indications are that drilling activity remains strong. The capacity problems in the industry weigh in against producers casually stepping aside from drilling projects they will not be able to get rigs for later. So long as oil prices don't completely collapse, the intermediate and long term picture is favorable to continued drilling and responds to the need to increase reserves.
Analysts have noted the seasonal tendency for the industry to weaken around this time of year. Of course the other tendency is for strong price action during the weeks leading into earnings reports. The relative earnings strength of the drilling and oilfield services compared to financial services stocks is inversely related to their relative price weakness. This should reverse fairly soon. Though the group is likely to move up, I think the best bets will be among the deep drillers expected to report strong sequential earnings growth this quarter--NE, RIG, RB/FLC and SDC. Among these, I like NE and SDC best. I've sold other drillers and service companies to concentrate on these.
Keep the faith and keep your shares.
Baird
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News