FYI EVERYONE!
I came across two extremely favorable articles which mentioned National-Oilwell Inc. in a very attractive light, both in the Nov 2nd 1998 issue of FORBES magazine:
Article 1 page 366 "Picking up the pieces" Some first-rate small growth companies are off 50% or more. Look around for bargains.
It mentions that National Oil is among 16 other comapnies with 18% or better annual growth since 1994, yet trade at less than half their recent highs and less than 10 times expected 1998 earnings.
Article 2 pages 370- 372 "How low can energy go?"
...At a recent $15 a barrel, oil is down by a third from a year ago. Denis Laplaige, a 47 year old manager of the MainStay Value fund ($1.3 billion under management) expects a recovery to $20 over the next two to three years. The reasons for the recent decline are obvious: Last winter was unusually warm; demand collapsed in Russia and Asia; and the prospects of high prices - a year ago the experts were predicting increases in the price of oil - prompted increased drilling at just the wrong time.
Falling prices, though, have had an impact of their own. Laplaige doesn't expect a surge in demand. He does, however, believe in the possibility of shrinking supplies. Inventories should typically be building at this time of year, and they are not. Russian production has been crippled by the country's economic chaos. The count of drilling rigs in the U.S. is way down. Given the positive impact that higher oil prices would have on some of the most precarious areas of the world...., it is likely that wealthy nations won't even protest a price increase.
The price surge would have a positive impact in the valuations of the integrated oil giants, but the biggest beneficiaries would be the specialized U.S. oil and gas exploration companies. Laplaige argues that a number of smaller oil explorers, are trading well below their probable breakup value. "The companies sell at a 20% to 50% discount to the value of reserves, never mind the exploration prospects," says Laplaige. At times, he adds, it is cheaper to drill for oil on Wall Street than in oilfields, and today is one of those times.
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Reason No. 463 why I think NOI is a great "Long" at these prices (under $20)
Rico
p.s. let's hope the overall market is in a buying mood this week! |
