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

To: Big Dog who wrote (63125)	3/28/2000 8:38:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

The Fundamental Story in Nat Gas is going un-noticed... Another factor is the reliance on Canadian supply to fill in for US shortages - but, perhaps not this coming year - re: <<As of March 17, Canadian Gas Association said gas stocks in the west were at 94.39 billion cubic feet (bcf), or 31 percent full, compared with 44 percent full a year ago. >> * nearly a 30% reduction in supply levels ... Q1 quarter over quarter earnings comparables for the Nat Gas pureplays will be phonemenal. In many cases $1.80ish vs. $2.65+ - or nearly an .85 cent/48% gain per mcf. Earnings are going to be the driver for the E&P side of the Oilpatch & the valuations are dramatically lagging the OSX stocks. Superior nearterm earnings fundamentals and lagging valuations = buying opp. Nice little cold snap across the midwest as well - temps in the 30's across the heartland. Interesting sidebar - Bob Brinker of national newsletter & radio show fame has moved his model to high cash positions, today Abby Joseph-Cohen of Goldman moved 5% out of stocks and into cash in her model. - this flight to cash is a potential sector rotation pool of funds for the Oilpatch; especially the large cap majors, mini's & Integrateds imho. The reporting of Q1 and the positive expectations of 2000 eps estimates will bring a strong rotation to Big Oil come mid Q2 at the latest imho. Come on OPEC lets run with the 1.7 M boe figure and then drop the bomb - that being, the number will include "cheating" over present production quota's !!! Then flip the "nitrous" switch back on for the Boom 2000 Super Train. Abby Joseph-Cohen moved 5% from stocks to cash, other analysts have as well. That pool of cash will be looking for fundamentally supported momenteum sectors soon. The Oilpatch should see some nice inflows & rotation as earnings set the stage over Q1 &2. I agree with the comments of Dain Rauscher on SII and that its valuation has gotten a bit ahead of itself here. Stockpicking & profit taking and rotation are the keys for success presently imo. Some interesting profit taking & rotation to laggard opportunities exist. I would not close out entire positions; but I surely would be trimming some SII BJS ESV profits here and rotating to perhaps a PGO, a HAL and especially to some majors, mini's and integrateds on the E&P side. The majors/integrateds are within 5% of their lows in many cases and look highly marginable/leverageable here. These stocks have 30-40% upside to merely their prior 52 week highs here and their earnings are improving dramatically. I would feel much more comfortable margining BPA TX UCL MRO COCb here on weakness, than a SII BJS ESV - for whom a 15-20% whipsaw correction; magnified to 30-40% with margin leverage can wipe out trading capital. I'd keep the high flyers in the "cash" portion of the portfolio and for those looking to leverage - I'd be in the laggards like PGO, HAL on any further weakness and especially the majors, mini's & Integrateds. Stocks like COC who has nearly 30% to its IPO price - which was at $16 Crude is a gift for the patient. MRO on any weakness here is a must own, UCL is a great play on Nat Gas and is transitioning into an E&P pureplay - is also a great buyout candidate. MRO also could see a spin off premium immediately applied on a break away from USX. Lots of leveragble value/laggard plays that offer the high potential of 50-80% leveraged returns over 2-3 qtrs here imho. Let the OPEC Show come to an end here so the Boom 2000 Super Train can get back on track... also, wouldn't it be nice if/when OPEC announces that their production quota increase will "INCLUDE" any cheating above prior quota's - hence a neglible increase in any "real" production... We have not seen $30 Oil for the last time in my opinion.