Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: jbe who wrote (63512)	3/31/2000 6:10:00 AM
From: jim_p	Respond to of 95453

Hanover Compression rents compressors to oil and gas companies that have existing gas wells. When the business turns down, you still need to rent compressors to get your gas to market. During the downturn, older gas wells develop a need to go on compression to enhance the wells cash flow which, in some cases is needed for a company's survival. Also during a down turn smaller companies generally are trying to conserve cash, so they rent instead of buying compressors. In addition to the above, 80% of all domestic drilling for the last two years has been for gas. The end result..........Hanover has done well. Jim

To: jbe who wrote (63512)	4/1/2000 2:29:00 AM
From: upanddown	Respond to of 95453

jbe I noticed that your post about possible over-valuation in the OSX sector was greeted with a deafening silence. I want you to know that I tend to agree with your concerns. A couple of weeks ago in the WSJ, there was a very interesting table about SP500 PEs. It broke down SP500 PEs by tech and non-tech. For most of the 90's, they were closely in sync before a wide divergence started in the last three years. Non-tech now has 2000 average PE of approx 13 (close to historical averages) while tech was approx 42. Curious, I dug out the 10 OS stocks that are SP500 members and checked their current 2000 PE. APA-78,APC-42,BHI-73,BR-27,HAL-45,KMG-12,RDC-45,RIG-45,SLB-62,UPR-23, AVERAGE PE = 45 (Higher than average Tech of 42). (I used current average estimates from I/B/E/S.) Its a mixed bag and many non-500 OS stocks have better valuations. There is also a strong possibility that estimates will be raised significantly with O&G prices at high levels but it is definitely something to think about. The talk here sometimes sound like a fight to the death between tech and oil service. It is much more complicated than that. If the hot money exits tech, there are many cyclical value sectors to choose from, only one of which is OS. Some of the other choices has much lower PEs and infinitely superior records of consistent profit growth. Just something to think about as the sentiment is so strongly bullish here. Even the correction camp sees only a short one with a quick reversal. I see some chance for a deeper and longer one to allow the underlying companies catch up with their stocks. We shall see. John