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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Tulvio Durand who wrote (17101)3/29/1998 7:51:00 PM
From: jbe  Read Replies (2) of 95453
 
....am somewhat taken back by your assessment..

I didn't really mean to give an assessment. Rather, my intention was to suggest an assessment. I should have used a second "perhaps" in the sentence you cited. Amend it to read: "Although almost all of the drillers/oil service companies in it have great cash flows, most have negative FREE cash flows (PERHAPS because they are building --
perhaps too many -- new rigs)."

I really don't know whether building new rigs IS the problem, or even IF negative free cash flow is something to worry that much about in this sector. In the meantime, however, I have operated on the principle "better safe than sorry." So, instead of buying the oil service stocks with the most BIG MO, I bought the two with the most reassuring (to me) balance sheets and best free cash flow (TDW, ESV). Maybe I was wrong! Was I?

jbe
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