Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: SliderOnTheBlack who wrote (25488)	7/10/1998 6:03:00 PM
From: The Ox	Read Replies (1) of 95453

Estimates for most companies in this industry continue to be revised downward at an ever increasing pace. A valuation calculator that uses today's (or yesterday's) earnings estimates is not worth the time it takes to enter the data. A perfect example of this was in the Disk Drive industry. Companies like APM were trading at P/Es of 20 when estimated future earnings were double or triple what the P/E reflected. Funny how the entire industry went south in a hurry when the future estimates were changed to losses instead of fantastic gains. Even the companies themselves were in denial for the longest time. The product transitions were approaching, the price cuts were fast and furious, and these companies still wouldn't acknowledge that future expectations were simply way to high. APM, using those valuation calculators, was worth $175 a share, and now it trades around 5 or 6 bucks. Until the price of oil rises and stays above $15/barrel, you will continue to see downward revisions to many companies in this sector. Please be careful putting your faith in the expectations of analysts. Way too many are simply lemmings. Respectfully, Michael

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