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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: upanddown who wrote (30403)10/6/1998 10:12:00 PM
From: RGinPG  Read Replies (1) of 95453
 
I don't think it's so much that analysts are withholding information until insiders get a chance to get out. I think they honestly try to predict what the companies earnings are going to be. It's just that "the market" is so much more accurate, timely, and smarter than they are.

Another thing, I think that now it has become well known and proven by experience that these companies' real earnings are tied to the price of oil. That fact causes their earnings predictability to be poor. The market pays for predictable earnings growth, that's why the darling blue chips rate such high P/E's. Therefore, these stocks will never command P/E's in the 20's to 30's like they do.

However, the big oils (reflected in the chart of the XOI) have predictable earnings even during wide swings in the price of oil.

osxstocks.com
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