Ajay, do you know something about Maverick Tube we don't know?....on paper nothing would suggest shorting at this time.
Oil drilling is approximately 25% of its business, which, in theory, should limit its exposure to OPEC fluctuation, but if you lay a graph of oil futures prices over a graph of the MAVK stock value over the last five months, the two correspond pretty closely.
MAVK shouldn't be joined at the hip with oil futures, but it is. So perhaps the picture isn't as simple as it seems.
Another mystery:
Right in the Dec 10-Q, they say wholesale steel has dropped by $35/ton, and most of this windfall will be reflected in the 2Q.
$35 X 134,000 tons = $4.69M = .30/share. Extra cash, this quarter alone.
But they've reduced their earnings target from .43 to .35. Why is that? Anybody?
BTW, I talked to IR yesterday, and they've confirmed they will make their quarter and are 'comfortable' with the year-end number of $1.70 I quoted off First Call, so we're talking a P/E of 10.5, against a projected growth rate of 30%, a value play if there ever was.
In the 1Q conf. call, they stated drilling had INCREASED in the December quarter and their end users (the drillers) foresaw no reduction in future drilling unless oil fell below $15/barrel. We're at $16 now....so, are you arguing that oil will drop below $15? |
