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: waverider who wrote (12327)2/21/1998 1:36:00 PM
From: Chuzzlewit  Read Replies (1) of 95453
 
DH, first, let me amend my statement by specifically excluding Value Line from the rest of the pack. They seem to be truly independent and their ranking system seems to work fairly well. They also do recommend avoiding certain stocks.

Now to your question: I'm very bullish about the sector and believe it is one of the very few value plays around. I think that for the reasons that Baird has so eloquently stated, the land drillers are riskier in terms of earnings visibility than the rest of the sector.

Value exists because we (the bulls) believe we know something that the market has not yet grasped. We believe that there is a shortage of rigs, and further, we believe that there is a shortage of rig manufacturers given the demand for new rigs. We believe that these shortages are independent of the price of oil, and thus profits for the off-shore drilling companies and rig builders should be independent of the price of oil. The market apparently believes that future profits in the service sector are tied to the short-term price of oil and/or the shortage of rigs is likely to be a short-term phenomenon. Time will tell, but this is one of the few cases where I think the market is incorrect.

But even if I'm correct, we still have the $64 question. When will the market come around to the bulls' view of the sector? Until the market becomes cognizant of the value play here we won't be able to cash in.

Regards,

Paul
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