BillyJeanne -- (Now that is a name I can love)
FGII -- what can I say? As you may know, I am fairly knowledgable about this company having personally contracted them to do a $6 million job for me a few years ago, and even having almost considered buying the yard back then for a price that is laughable now.
Also, as you may know, I was intimately involved in the offshore drilling business since 1982. My offshore drilling rig brokerage company, Loosbrock Offshore, was the world leader in rig sales and purchases from 1987 to 1993. My former partner continues to be heavily involved to this day and I stay in regular contact with him in Norway. Total rig sales from 1987 to today for him and I combined likely exceed three billion US dollars.
Prior to Loosbrock, I was the editor for drilling publications for Offshore Data Services in Houston. (This is the company that supplies the offshore rig count each week and is considered the publication "of record" for the offshore industry.)
I have wined, dined, sipped and supped with almost every swingin' dick in the offshore rig business. It is a relationship business, and I cultivated many great relationships, worldwide.
The offshore rig museum in Galveston, Texas was originally my project that I created. It was eventually developed and is now run by Carol Cage, who was my employee at the time I "invented" the idea.
I could go on and on about my history of close affiliation with the offshore industry, but suffice to say that I know the commerical side of the drilling business (offshore) as good as anybody and better than most.
In addition, I know my way around the stock market, having been trading since 1977 and being a NASD registered rep for a few years.
So I think I have a firm handle on offshore and stocks.
Stocks are not rational in movements. And as a few posters have said here, NOBODY knows what will happen tommorrow. It amazes me that all these soothsayers actually make a living predicting things when all they do is create a feasible case around a truly unpredictable future event.
With all that said, here is my take on FGII.
1. They are making a ton of money and will continue to do so for years.
2. The CEO is a money making machine. I know how he operates from my general and specific knowledge over the past 8 years or so. This man will MAKE MONEY in ways that haven't even been thought of yet.
3. The managment team in place at FGII is THE best in the business.
4. Rig orders are going to come in to fill as much capacity as there can be created at FGII. I KNOW THIS !!! Don't be fooled or misled by all these analysts that say the day rates aren't high enough to justify newbuilding. That is pure horsecrap. Drilling companies WILL order rigs if one of two things will happen -- a) they have a contract for the rig on delivery, or b) They get some stupid banker to finance the rig. (I say stupid because bankers are always eager to loan money when a market is at the top when capital goods are very expensive, yet they are loathe to lend when values are low -- just the opposite of what they "should" do, IMO.)
5. Margins for "small" jobs at FGII will be sky high as drillers don't care about price, they care about delivery...they want it NOW.
What does all this mean to the movement of the stock? I don't have a clue. I just have to go with the premise that this FGII is a money printing machine and that this fact will be rewarded in the market. Maybe it won't. The market is such a weird place that anything can and will happen.
But I would much rather put my money on a company that has a stellar future and is making a BUNCH of money NOW, than one that MAY make a penny or two 2-3 years from now. (As has been mentioned on this board.)
I am ass deep in FGII stock and options and I have every confidence that over the next 12 months the market will come to recognize the value in this company and increase the mutiple...Jefferies says FGII could come to be regarded as a growth stock and trade at a corresponding "growth stock" multiple. I concur.
So, BillyJeanne, I hope this helps. You aren't alone. FGII is just taking a brief nap, so sayeth Thean. Maybe the clock will go off next week. FGII earnings come out Jan. 21 or so. Maybe we will have a price rise in anticipation and then some very nice numbers. And THEN, maybe the market will start to give value to actual earnings for FGII and companies like FGII in the sector. It is GOING TO HAPPEN and I truly feel the worst is far behind us. If you have held the course so far, don't give up now as we turn the corner.
mike (aka big dog) |
