Here's a thought:
Many on this thread are stating : "when Asian demand ramps up", "cold winter", etc...
- what if the asain recession/depression lasts for another 2 to 3 years with the worst yet to come?
- what if this winter isn't the super cold La Nina winter?
ya see, it doesn't make sense to say that company X is selling at a 99 p/e of 9, because it was selling at that level 1 , 2 and 3 months ago. Earnings estimates have been reduced and prices came down with them. Earlier this year, these stocks snapped back because oil snapped back, with the hope that it would sustain itself at $15 or $16. Now, it has been below that level for months.
THAT is the BIG problem here.
DO and EVI, etc are selling off for a reason. The reason hasn't been released by the analysts yet, but there is a reason...and their clients are the one who know it.
ESV is still projected to make $2.00 this year but if you look at the lowest estimates, they'll probably make ~1.75...and these estimates probably assume a return to 17 oil by this winter...if that doesn't happen, then the company won't even come close to making that in 99, and suddenly the p/e of 8 turns into a p/e of 16 for a stock with an unclear outlook.
I hate to bring down everyone so early in the weekend, but this is what these stocks are assuming right now...nothing more and yet nothing less.
Paulo |
