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To: allevett who wrote (13595)	10/22/2005 9:56:08 AM
From: Ed Ajootian	Read Replies (2) \| Respond to of 37387

allevett, ALY -- Yesterday I added a fair amount of shares to what had been a somewhat small position in this. At $9 it is trading at about 20x the current year earnings of their core business that existed when they put out '05 guidance last May. This is the ballpark of the average P/E ratio given to each of: a) diversified, b) onshore drilling, and c) production & workover stocks, per RJ's latest energy monthly (go to raymondjamesecm.com , click on "Energy Monthly", and the OSX stat sheet starts on page 16). I'm not exactly sure which category of the above 3 best fits ALY, but in this case it doesn't matter since the market seems to be giving a similar P/E ratio to each. I am willing to pay a market multiple for the old business for 2 reasons. One, since May they have added several businesses that look like a great fit, and per Micki (the ALY CEO), he says they have been paying around 4 X EBITDA for their acquisitions (per his Smith Harris presentation), so these acquisitions are almost certain to be accretive to EPS. Two, this company has been growing at a vastly greater rate than the typical, more mature oil service company, and deserves a premium over the average market multiple. As to why the stock has pulled back, I think it has a lot to do with the fact that there is still a lot of cheap stock that is flooding the market. Around a year ago they did several PP's at $3/share, and it seems that many of these shares had yet to be sold based on the latest registration statement they have filed, on 8/30. Morgan Keegan has been the financier for this company, and has made tons of investment banking fees from them. It thus would not surprise me if MK is just waiting for 3Q earnings to get announced before initiating coverage of these guys, hopefully with a "strong buy" rating. The buying that comes in from this hype should go a long way toward soaking up whatever remains of the cheap stock, then it should be back to the races.

To: allevett who wrote (13595)	10/22/2005 10:47:55 AM
From: Suma	Respond to of 37387

Thank you Allevet... I guess that is encouragement to average down and I nibble 100 shares at a time but I bought high. When everything ramped up... Typical of my stock management. I get encouraged when I see a stock up and have a hard time buying a fallen one.. Shows how much psychological stuff goes into the market. I like what someone said ... maybe here or on another stock thread... You look at a stock that's up and think , wow I made five hundred dollars.. And that is not what you have UNTIL YOU SELL. The next week the stock falls and so does your profit. Knowing when to buy and when to sell and when to HOLD.. Gifts..