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 (31538)	11/6/1998 9:15:00 AM
From: RGinPG	Read Replies (2) of 95453

The sector is only undervalued if the price of oil recovers (which I believe it will eventually). It is certainly not undervalued if you look at P/E's, projected P/E's, earnings growth numbers, and you take into account how volatile and unpredictable the earnings are in the sector (the market gives a premium for stable and predictable earnings, and discounts stocks with unpredictable earnings). The fact that the market has had a great run the last week or so while the OSX has languished at the same level can also be construed as bearish. Personally, if we get a small move up today, I will short some more. Always with the plan to buy back in 5 to 10 days from now. If the downcycle takes us close to previous lows, I may break my vow and buy on margin, because I do believe the price of oil will recover, along with the earnings for these companies. osxstocks.com

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