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

To: IndioBlues who wrote (51440)	9/20/1999 2:04:00 AM
From: upanddown	Respond to of 95453

Slider, why are your price to book and price to sales metrics any more indicative of value than plain old price to earnings? Good question, but the answer is simple. PE's do not support his position so he ignores it. With Slider, everything is black and white, never gray. If he is long, everything is perfect. If he is short, everything is horrible. If there are factors positive to his position and others that are negative to his position, you will hear about the positive ones over and over and over and never a word about the negative. He chooses to ignore the fact that FGI's backlog went up in the first quarter and instead he just calls that the peak (rather than the valley that it was) and focuses on the second quarter as if there is going to be a straight burn of the backlog from here with no new business whatsoever....even with doubled oil prices. To me, he is the best contrarian indicator on the thread and I will be following his advice when pigs fly. I imagine this will provoke the usual 1000-word diatribe. Kind of useless since I don't read his stuff other than to find out what I DON'T want to do. John

To: IndioBlues who wrote (51440)	9/20/1999 10:15:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

Today should be a "day of attonement" for ALL FGI Investors on Strictly Drilling... My primary point on all of the discussion here on FGI is just this simple ! Here we have a thread favorite. A stock that many have owned, traded and researched for a year & a half, or longer. However; as Silicon Investor is "thought" to have a slightly more sophisticated investor/trader readership/membership; I would simply like to point out the undisputable FACT - that "ALL" of those involved with FGI have totally and completely FAILED to discuss this company in a realistic, unemotional way. The story with FGI is really quite simple; in fact it is so simple - that those whose tirades on how this stock is so undervalued; have forever lost credibility imho. The story with FGI is this: a small, well run company went public with an IPO at the zenith of what so far has proven to be a historic blip on the chart of Cap Ex Spending and Investment in what was an incredible Offshore Rig Construction Boom peaking in late 1997 - with that backlog of construction business just now being worked off... The story of FGI is one of all the numbers looking great on a "trailing" basis. Per Indio Blues question on why not use FGI's PE ratio as a comparison - simple; - the same reason that the Street is not using FLC's trailing earnings number... FGI's trailing numbers are no where near indicative of their present, or future projected revenue, or earnings numbers. That no one on this thread - ever made a single post comparing the basic fundamental metrics of FGI to its peers; such as MDR, UFAB, or HLX is a gaping faux pas... No one has addressed why FGI has had massive insider selling and why it has a short interest that is so disproportionate to its peers that it literally screams for an explanation - that has never been given... Perhaps is someone would have taken the "devils advocate" stance on FGI long ago - we wouldn't have had all of these thread members and readers jumping on the FGI bandwagon on those "pops" to $18 and $20 here of late; who now have seen their investment value in FGI drop in half; as the OSX sector ramped to new highs... Was there something happening with FGI behind the scenes ? Was the Street just ignornant about not buying FGI here, was FGI the value story/play of the Oilpatch here ? - Or, was FGI at $18 & $20 - simply one of the most "OVERVALUED" companies in the Oilpatch (as shown by the fundamental valuation comparison to its peers) and is it merely slowly, but surely returning to its fair market value here at $10, or under ? ...sometimes you have to believe what the tape tells you. The tape, the insider selling, the short interest and now "I" am telling you that FGI at $15, at $18, at $20 - is grossly overvalued - period. That no one on this thread ever brought up the most simplistic valuation comparison of FGI to its peers; or correctly discussed the "true" viewpoint on FGI's backlog - is a "indictment" of the real level of sophistication and level of honest discussion on these companies. There seems to be an allmost superiority attittude on Silicon Investor towards the Yahoo threads etc. - but; with all the brainpower here on Strictly Drilling; and that no one ever put the FGI story in proper perspective - is perhaps the realization that we are no less a "cheerleading" thread than any on Yahoo... all that we have is the "SI" PC police and SI Jail keeping the threads a little less cluttered... as far as having a superior degree of brainpower ? .... I'll just point to FGI as the posterchild example of the potential for this thread to neutrally discuss the true valuation metrics of an individual company; or to unemotionally admit why a particular "favorite" is getting decimated by the Street - while the thread continues to sing its praises.... We just had virtually every driller in the business complete historic levels of upgrades and newbuilds. Within the Oilpatch we have had and will probably continue to have; peaks & valleys on everything from the commodity prices themselves - to individual areas of emphasis, or investment within the industry. FGI just benefited by a historic blip in offshore rig construction. Right now in the Oilpatch; the Street is focused on those companies that are poised for GARP - Growth At a Reasonable Price... FGI is NOT growing... the are shrinking; just as their market for their procuct is... FGI is NOT at a "reasonable price" - per the fundamental valuation comparisons to UFAB HLX or MDR. FGI is merely returning to its fair and proper valuation based on today's reality and the expectations of their future... FGI is no longer being valued on their past - get over it ! Opening down again today... now, HLX investors have a decision to make; will FGI's continued decline push HLX down on the ratio balancing ? Imho; you average in "slowy" to HLX here - as it may well move down in ratio sympathy to FGI's continuing decline. Smart money is short FGI - and "slowly averaging in on HLX as it retraces"... ultimately; going long HLX upon covering the FGI short. I still "predict" - no merger; HLX will require a better ratio - and FGI gets KILLED by the Street is they up the ratio here... right now - word on the Street is FGI is in way, way over their head here... this is looking like the posterchild for FUBR in the opinion of some... HLX gains nothing from FGI here imho. The story isn't over on this one yet... once again: On a valuation basis of book value, price to sales, cash & backlog multiples - FGI very, very easilly could go to $5 - if it is valued the same as its peers. In my opinion; based on the math; FGI is allready getting a substantial valuation premium to its peers...and it will not continue; and in fact - with its decline of late; the Street is slowing bringing FGI within the valuation levels of its peers. UFAB - a fab co. trading at 1.25 x book value & .59 x sales. biz.yahoo.com MDR sells for 1.16 x book and .45 x sales biz.yahoo.com HLX - trading at .99 of book value - with a much, much bigger backlog than FGI and a lower multiple of price to sales .17 x sales. biz.yahoo.com FGI - trading at 2.41 x book value - .52 x sales; is 3 times the price to sales multiple of HLX, 15% higher than MDR; double the book value multiple of UFAB and MDR and nearly 2 1/2 x HLX's price to book multiple..... and you guys think sub $10 FGI is impossible ?!?!?! The way I see it; FGI is one bad news event away from $5. price to book of the 3 peers averages 1.14; FGI @ 1.14 x book value peer avg; $4.39 x 1.14 = $5.01 FGI @ peer avg .41 x sales; 20.89 x .41 = $8.57 ... so we have FGI at a multiple of book value at $5.01 and at a multiple of sales at $8.57; if you average the two = $6.79 per share. Lets hope nothing happens to that sales number; because that's the only thing supporting a valuation over $5 bucks imho PS: Geiche .... this one's for you (VBG). The "WalMart" Alert stays posted on FGI: ie: Watch Out for Falling Prices ! PS S; John C - about them "Pigs Flying"... why doesn't the Street value FLC on their trailing earnings ? that you make the PE arguement - is the equivalent of tatooing "Village Idiot" on you forehead imho.... Using the "trailing PE" to value a company that is in revenue free fall is moronic - sorry; but that you would even grasp at that straw is the epitome of the indictment towards this thread of ever possibly discussing a favored investment idea neutrally, or rationally.... "because it doesn't support my case" --- C'Mon John; why has the "world" sold FGI off to $10 bucks here - 1/2 of its recent high ????? WAKE UP ! - it's not a Slider -Trilateral Commission Conspiracy ! It "IS" because of FGI's trailing PE, SALES, EARNINGS, BACKLOG, MARGINS, are ALL falling ! - using, or trying to push the idea of using "trailing" numbers on FGI here is a total insult to the newest of newbie's and is the ultimate self-indictment on your emotional inability to separate emotion from logic - in valuing companies, or in investing, or trading... this is what separates the men from the boys here (VBG) - the ability to not get "emotionally blinded"... John; your comments should be used in every traing class for future traders.... under the chapter titled: catching falling knives, and burnt out shooting stars... good luck and I think you're down another 3/16ths to $10 5/8ths as we speak.... Keep choosing to ignore the technicals, the fundamentals and the tape... as long as there are so many who have the emotional incapacity to dump FGI - I make money; thank you John Clarke & Thank You Geichepoo... see ya at $9, $8, ..... $5 ???? ...what happens to FGI here; if HLX announces thery're out ? - food for thought. Hooooo Hahhhhhhh ~