Veritas / VTS........stockpicking versus market timing
I am irrationally - cautiously semi-exuberant...<VBG> . I think the bottom line here; is one needs to be buying ''some'' oilpatch stocks here. It has never been more important to be a good stock/company picker vs. being a market timer. The world is not coming to an end - but still has serious problems. However, there were and are, prices that are mathematical ''anomalies'' - beyond bargains, lower than breakup - fire sale valuations; VTS @ $10 was one.
Sometimes, one just has to trust the numbers... knowing that the market will ultimately ''catch up.''
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:VTS (Veritas DGC, Inc.)
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Message 243 of 255Reply
This was a watershed event for VTS today....
SliderOnTheBlack
Oct 15 1998 12:54AM EDT
There were some substantial sales of medium/big blocks, which I view as the end (or near the end) of tax loss selling; by the Funds who have an Oct 31 fiscal year end (many). There were also a couple of big block (100K+) BUYS today. Moving strongly up in the face of some big block sales in a soft enviroment today; was a major turning point. On any good Crude Oil news; this will blow through $18... $24 is fair value in my opinion in this market enviroment. I expect to see $30+ with a good Q1 1999 and we should see $36-$40 by Q2 '99 release...$60 as a target price in 12-18 months. - just ''my'' opinion. Only time will tell...
VTS remains; imho - the single most undervalued stock in the oilpatch, with the most upside potential mid-term (6-24 months).
Good cash position, low debt; pumping big money into R&D and contrary to many current opinions this is not just a ''land based seismic'' company. They are very strong in many land and transition zone markets, but have moved strongly forward in deepwater and new technologies. Their seismic library data sales are incredibly strong and their International market diversification is their main strength.
Veritas is selling for less than asset value of its working equipment & cash/receiveables:
Cash $40 Million
Act Rec. $151.8
Seismic Equip $206.4
Data processing equip $72.9
Materials $4.0
Ships $7.5
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$460+ Million Dollars in assets/cash & rec. versus a market cap of $250 million - not much more needs to be said... this is the ''posterchild'' for a VALUE play !
As far as a comparison to PGO; which I love and own; VTS is the better value today - unequivocably. I can buy $2.96 EPS for $12 with Veritas - and have a near ''6 bagger'' to its 52 week high. With PGO I have to pay $14 for $1.20 EPS - nearly ''double'' the price to EPS of VTS; with a ''2 1/2 bagger'' to 52 week highs versus a ''near 6 bagger'' with VTS. - simply more ''bang for the buck'' with VTS in my opinion...Irregardless of PGO's deepwater presence and move into more management oriented services with their FPSO's; from a return for the dollar invested, VTS is the clear winner imho. Margins are both nearly identical @ 14%; 5 year EPS growth estimates are near identical at 20-23%,and VTS has triple the return on assets of PGO @ 15.66 vs. 5.20 and VTS has double the return on equity of PGo @ 26.32% vs. 12.21% .... both fine companies; PGO may be in a more pure deepwater segment; however VTS has strong, strong earnings in land & transition zone sectors and is moving strongly into deepwater and its deepwater vessells are doing very well... VTS is a much better diversified company, with more potential income streams - especially in a soft market enviroment and can grow dramatically in the deepwater niche in a positive crude oil price enviroment. My vote goes to VTS in a comparison - I own both, but 6:1 ratio of VTS to PGO.
surf the Veritas site - and you'll be a ''true believer''...
digicon-hou.com
good luck all... averaging in here is the conservative play; I think we've turned - never to see $10 again; but realistically - irregardless if we see a $6 VTS; we will ultimately see a $36 VTS again as well; the upside dwarfs and downside by a wide margin. This is a rare opportunity.
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