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

To: jbe who wrote (67899)	6/8/2000 6:22:00 PM
From: Archie Meeties	Read Replies (1) \| Respond to of 95453

I think you're misunderstanding the concept of laggards in the oil services industry. The word refers not to the stock price, but more to where the company fits into the complex osx cycle. A laggard is one that is "late cycle", such as the fabs. They lag because before their business picks up, other subsectors must see a strong increase in business. In the case of new rig construction, day rates must rise enough to merit the construction of new rigs. In fact, in BigDog's OSX 101 class, you will learn that the limit on day rates of rigs is determined by the speed at which fabs can make them. (As a side note, the consequence of this is that the peak cycle earnings of the fabs is determined by the rate at which new fab yards can be built. I don't know if this has any practical value, but it might mean that the fabs have the greatest potential for trough to peak earnings growth.)