Michael H; ...good idea
There is some money to be made by picking the best of the best & separating the ''men from the boys'' before the Street does....
I think the strongest companies are CXIPY SCSWF CDIS PGO VTS & CLB. High tech, deep water, solid balance sheets, well respected and acknowledged niche leaders and far superior growth prospects to their peers in the oilpatch and most still have EPS growth potential in a continued, or prolonged contraction here. These are THE buys imho.
Drillers; I like SDC, DO, RIG in that order and FLC as the risk play. I see no reason to own any land drillers or the other jack up/ GOM oriented drillers. SDC is the most bang for the buck and has a stellar balance sheet and has a strong Internationallly positioned fleet.. DO has tons of cash, low debt and RIG is the Deepwater leader and a pure deepwater play. FLC has $4 EPS potential and is leveraged to the max - a big, big win or will get rescued in a buyout - in a worst case scenario. ATW is interesting here as well, NE, PDE, RDC, ESV, MRL all on the next tier imho to the above.
Service - gotta own the leaders here in RON & WFT; then FGI VRC GLBL NOI. RON & WFT - simply must owns in ANY oilpatch portfolio, buyout candidates and Industry leaders. FGI is now ''the'' Fab Co. of choice, VRC & NOI leaders and excellent values in the equipment mfg.arena and GLBL as my pure value and service company; who is not getting any value for their ever expanding International diversification and the recent acquisition of income producing assets in a buyers market .... The boats are intriguing here; as there is a minimum amount of Oil & Chemicals and crews that need to be transported irregardless of crude prices. TDW stands solid as the strongest of the Boat Stocks, CKH & GMRK seem to be more of a niche play and solid as well; HMAR as the leveraged risk play here...
DO has to be the ''accounting-balance sheet'' pick here; and the company with the most options potentially - lots of cash - will they buy GLM when its brought to its knees ? Buy PDE for the International Diversification - the newbuilds and entre into So America ? MRL ? NE merger ? ...
CRB a 21 year low today folks !!! --- if you don't buy here; Warren Bufffet will be destined to be a forgotten man - to forever be confused with writing Margarittaville....
the terms value, or cyclical will be officially removed from the investing & financial worlds lexicon... It doesn't get any better than this... This is THE real deal; the Commodity Markets & Oilpatch of 1998-9 will be written about in text books 20 years from now.... Bank on it. I agree that there are NOT any clear, concise indicators for anything but a slow, climb for Oil from the bottom; for that reason alone - I feel we will get an unexpected rubber band snap in crude Oil mid 1999; as everyone is calling for no demand and way to much production has been shut off, cut back, delayed and cancelled. This type of production cut - downward spiral can not be ''managed'' or accurately calculated imho; $8 Oil - guarantees $25 Oil ... not ''if'' but ''when''. |
