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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (14089)	3/6/2002 9:41:58 PM
From: Don Earl	Read Replies (1) \| Respond to of 78530

Paul, PGO is in the process of being bought out by VTS at an exchange rate of .47 to 1. Assuming the price of VTS holds up that would make PGO worth about $6.90 in the merger. Veritas is not a bad company, but I believe it's worth paying attention to the fact the newly merged company will be incorporated in the Cayman Islands. As far as PGO being a value stock, I don't see it. The company has an unholy amount of debt and I was more than a little surprised Veritas would consider the partnership. The only reason to buy PGO would be as a potentially lower entry price on VTS, assuming the merger goes through which I don't see any reason why it won't. As far as Seitel is concerned, it's a bankruptcy waiting to happen, and probably within the next 6 months. It's been downgraded twice in the last month and received write ups in both Forbes and the WSJ on accounting issues. $39.4 million of Seitel's revenue for the last 9 months are non cash barter transactions. The company also capitalizes around $4 million per year in interest expenses and wages as assets to keep the costs off reported earnings. They also depreciate their costs at about half the rate of the rest of the sector. Seitel makes Enron look good by comparison. Put options on SEI are a good value, but a person would have to have a death wish to hold the stock long overnight.