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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Gary Burton who wrote (51094)	9/14/1999 1:34:00 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 95453

No, but I just picked up another 25K of TMR at 5 1/16 - 5 1/8, and looks like I might get another 5K at 5 :-))) I wonder what kind of idiot is selling at these prices...

To: Gary Burton who wrote (51094)	9/14/1999 1:38:00 PM
From: Wowzer	Read Replies (1) \| Respond to of 95453

For anyone who is still bullish on the OSX...SDC looks good at this level...Went long at 24 1/2. 24 is strong support... Rory

To: Gary Burton who wrote (51094)	9/14/1999 4:00:00 PM
From: Terry D	Respond to of 95453

SIGN OF THE TOP _ A LONG-TERM BEAR TURNS Houston may have lost the Oilers to Tennessee, but its reputation as an oil town remains intact. Whereas the city's dependency on the oil industry weighed on its economy over the past year, all signs point to a resurgence for the town and the industry, as crude prices have more than doubled in the past 10-months. How much higher will crude prices run; how much longer will OPEC curtail production; how much colder will this winter be than last (if any); and how much will these factors influence future earnings in the oil patch are among the questions likely to be raised at this week's Dain Rauscher Wessel's 7th Annual Energy Conference in Houston. While there are bound to be a number of conflicting forecasts, one thing is certain - the Conference will focus attention on what has been one of the market's biggest surprises in 1999 - the dramatic rebound staged by the Oil Equipment and Services sector. A few things pop out from the table. One, the average percentage gain is astounding. Don't bother, I did the math for you - 121.0%. Since March! Second, most of the stocks are trading just off recently established 52-wk highs. Third, the gains are coming long before the earnings. The average estimated p/e for FY00 is a lofty 33.2x, or slightly more than 2x the industry's projected growth rate. Nothing outlandish for consumer growth stocks, but a little pricy for a cyclical group like the oils. What is missing from the table, however, is that despite this year's herculean gains the group trades at about a 60% discount from its late-1997/early-1998 highs. Of course, that was just before the group's earnings cycle peaked. Considering that the industry should see its earnings bottom in the current quarter, we appear to be a long way from the next zenith. As such, investors continue to place heavy bets in the oil sector on the assumption that the group's lengthy and pronounced underperformance means that there is plenty of upside left to the rally. Of course, whether these bets pay off depends largely on the future direction of crude. Given that Briefing.com underestimated the degree to which the price of oil would fall in 1998, and the extent to which it would recover in 1999, we turn to the Energy Information Administration (EIA) for third party guidance. In its most recent report, the EIA predicted that world oil prices for the remainder of 1999, and all of 2000, would be $22-$24 per barrel or $1-$2.50 per barrel higher than the agency forecasted in the preceding month. Strong OPEC compliance with agreed-upon production cuts is seen as largely responsible for crude's meteoric rise over the past 10-months. For oil prices to remain firm through the balance the year, OPEC must adhere to these cuts when it meets on September 22. The overriding assumption on the street is that member nations will continue to toe-the-line until the March 2000 meeting, at which time some increase in production is expected. Briefing.com's skepticism regarding OPEC's ability to comply with agreed upon cutbacks contributed greatly to our underestimating the recovery power of crude prices and the oil sector. A robust domestic economy and a steady recovery in the Asian-Pacific and Latin American economies have also contributed to the jump in oil prices. As long as the Fed's recent rate cuts don't seriously slow the US economic engine, there is no reason to suspect a material slowing in crude demand any time soon. The combination of strong demand and dwindling supply should keep crude prices well supported over the near- to intermediate-term (at least). With oil prices well above $20 bbl, the major oil companies are now seen increasing their FY00 exploration budgets by anywhere from 10% to 15%. If EIA estimates prove correct, and crude prices stay above the $20 bbl level through CY00, then the street will begin to factor in even greater exploration budgets in the out years. As they do so, earnings and ratings upgrades will follow. In fact, the ratings game is another reason for investors to remain bullish on the oil patch. Unlike in early 1998 when the street adored everything oil-related, sentiment remains guarded in the oil stocks at the moment. Though we have seen a handful of ratings upgrades in recent weeks, many firms continue to rate the stocks in the group no better than neutral/hold. This leaves plenty of room for future upgrades. Just as gas fuels cars, ratings upgrades fuel stock/sector rallies. So while concern over the upcoming OPEC meeting could let some air out of the sector over the next several days, the favorable supply/demand equation suggests that crude prices will remain above the magic $20 bbl level for the foreseeable future. As such exploration budgets will rise and the Oil Equipment and Services sector will see continued earnings growth. Though some of the good earnings news is already factored into the price of the stocks, Briefing.com maintains that there is enough upside left to warrant upping our rating on the sector from neutral to slightly outperform.