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Gold/Mining/Energy : Friede Goldman Halter (FGH) -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (79)	9/16/2000 11:48:50 AM
From: Mark Adams	Read Replies (2) \| Respond to of 177

Positive mention in Barrons Q: What about oil-service stocks? A: The oil-service area we still like because the oil production rate globally is over 95% and the only spare capacity that exists is in Saudi Arabia. Companies started spending money only in late spring of this year for new production, and it will take at least 24 months for meaningful amounts of new production to come on stream. While the price probably won't go much over $33 a barrel, it is going to be well over $20 a barrel for the next 24 months. And drilling has to increase. We continue to like a lot of the offshore-drilling companies. We have been buying Friede Goldman recently, the equipment provider of choice in the U.S. The boat fleet and the offshore-rig fleet are probably about 20 years old each, so not only do we need new equipment to be able to increase the productive capacity of the world, but we need to replace some of these aged boats and rigs that really aren't very efficient. Friede Goldman's backlog is starting to rise. This past week it got a $50 million contract. It's early in the cycle, but we think peak earnings will hit $2 a share. Next year we estimate earnings will be 40 cents a share, jumping to $1.50 a share in 2002. It's risen lately but the shares still look attractive here. We think it's a $15 stock.