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

To: Labrador who wrote (46230)	1/18/2012 4:43:16 PM
From: E_K_S	Read Replies (1) \| Respond to of 78523

Hi Labrador - Re: C&J Energy Services, Inc. Commo (CJES) -NYSE This is one of my current favorites. I am accumulating a position w/ 60% of my buys completed. Just missed completing my buys today at $17.16/share. Hopefully, I will be able to get the rest of my shares at that level or lower. The company really does not have that long a history so their earnings could be suspect when viewed for the long term. My brief review of their financials shows that revenues are exponential, doubling from 2010 to 2011 as they build more fracking rigs to bring into service. They build these Rigs based on 2-3 year customer service agreements so they are pretty much assured of their use because of the terms of their service contracts. I was able to identify their 8 largest customers (those that have entered into these 2-3 year service agreements). They are very large and credible E&P companies that have sound balance sheets and can afford their services. Their next quarterly earnings are to be released 2/15/2011 and analysts show $3.17/share for 2011 and $3.28/share for 2012. Based on these numbers, current BV and their trailing PE, this stock (for me) is undervalued. Their GN calculation shows that $25.00/share is fair value. At the current price of $17.76/share, the stock is 40% undervalued. I have been buying very small lots of shares at prices below $20.00. I expect their earnings to stabilize at current levels and do not expect the exponential growth as we have seen in the past. Even with modest future growth this stock is significantly under valued at current levels (if you believe their financials and/or managements recent forward views). My total position is still small less than 1% of the portfolio but I am still quite excited to see what numbers they actually report in February and if they can continue their growth. EKS

To: Labrador who wrote (46230)	2/26/2012 11:53:35 AM
From: E_K_S	Read Replies (4) \| Respond to of 78523

C&J Energy Services, Inc. Commo (NYSE: CJES) - Closed out my small position GreenHunter Energy Inc Common s (AMEX: GRH) - looking to start a small tracking position Heckmann Corporation Common Sto (NYSE: HEK) Financial links to Companies mentioned: goo.gl Hi Labrador - I closed out my small position in CJES after they reported earnings last week. The company generates a lot of free flow cash, is very profitable, carries no debt but may be expanding too fast. In their earnings report, they stated that they have two new FRAC fleets yet to be contracted under their standard two year term and one more being built to be delivered at the end of the year (not under contract). Further more, they have one of their FRAC fleets coming off a two year contract (next month) that hopefully will be renewed for another two year term to the same client. The company has a limited history in this field never experiencing the "bust" period in the cycle. Since I had a 25% gain in less than 1 month, I figured I would book the profit and look for an entry point below $17.5 on any significant sell off. Is CJES a value proposition? Based on their low PE, zero debit & huge free flow cash, I would say yes. Could they liquidate their equipment at cost in a "bust" cycle? Probably not but if their specialty services and parts business expands as fast as their fracking business, they could weather a potential slow down much better. IMO, the Buy in point is key since at the right entry price (ie below $17.5/share), you are buying earnings at a very discounted price even if 50% of their fracking fleet goes offline. Also, they do have a pretty good parts business, so one or more of their fleets could be used as parts inventory in a worse case sereno. GreenHunter Energy Inc Common s (AMEX: GRH) serves the same boom sector providing salt water waste disposal from fracking as well as continued well monitoring services. The value proposition will be in the combined environmental services they will provide once they ramp up their service business. I am valuing the company similar to Heckmann Corporation Common Sto (NYSE: HEK) which is selling 3x that of GRH. GRH is NOT a typical value company but it's the potential value that is being created by the CEO Gary Evans. Two recent events for GRH announced last week include (1)GreenHunter Water Closes on Significant Acquisition of Appalachian Commercial Water Disposal Facilities and (2) the development of Web based "real time" Well monitoring systems called RAMCAT (Remote Access Management Compliance Asset Tracking. The $8M acquisition for the disposal wells were negotiated w/ restricted common equity and a preferred series w/ an 8% rate, no direct (bank) debt was used. According to the press release last week, the deal comes w/ $15M in annual revenues from the ongoing business that will be merged w/ the other services the company now provides. The potential for huge cash flows for GRH is based on what the environmental service sector now obtains; the ability to maintain high margins in excess of 60% over the term of their client service contracts. The next key event for GRH is to obtain one or more exclusive long term client service contracts which I expect to occur since CEO EVANS is also CEO of MHR the E&P company. As Evans expands the Triad Hunter Midstream business, I also expect GRH's RAMCAT service to be expanded to provide "real-time" well monitoring on all the wells in their gathering system. This would not only include MHR's operated wells but all of the other owner/operators that supply NG & Oil to the Midstream gathering system. Evans is building a complete end-to-end environmental service company specific to the boom in the new shale wells drilled and put into operation. Their use of state-of-the-art technology to monitor these wells (cameras, flow sensors etc) for leaks and/or other environmental issues will generate monthly reoccurring revenues and help reduce owner's/operators liability insurance costs. EKS