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

To: Broken_Clock who wrote (58469)	1/13/2000 6:54:00 PM
From: The Ox	Respond to of 95453

For a company who's revenues decreased by 34% yr over yr and who's SG+A remains the same, Mr. Palmer should be careful about references to his increased stock price which is almost double what it was this time last year. Going forward, I suppose there is a lot for the CEO to be happy about, mostly that they weathered the storm and continue to be profitable, more or less. Increases in A/R and Inventory don't look good at first glance. Contract disputes and lower day rates aren't all that pretty either. The real issue is where will this company be in 12 months and where will the stock price end up? While day rates are on the increase, they are no where near where they were at the end of the last cycle, so one would expect RDC to be much more profitable going forward vs. this last year. The 91% rig utilization number is significant and increasing day rates should restore the company's cash flow. I guess the first question one should ask is, can the stock price repeat it's performance of last year, in other words, can the stock double from here? My answer is an absolute yes if I were sure that oil prices would remain at this level all year long. I don't really follow RDC that closely and I haven't dug into some of the important issues, like long term debt. I guess since I'm long term bullish on the services sector, I would have to say that RDC looks more like a buy then a short for the long term. Short term, the stock has come a long way and had a nice pop today, so it might be a very good short candidate, especially if you believe that crude prices have snapped back too high, too fast. After reviewing what I just wrote it looks like I may be talking out of both sides of my mouth<vbg>. Not sure if this is rambling is of any help! It might be wise to see if the stock continues to run up on earnings enthusiasm and if it moves another 10%, that might be the time to enter a short position. I haven't checked out the chart so some TA would probably be very helpful to look for resistance levels and use them to establish shorting target prices. Good luck, Michael