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

To: 007 who wrote (14642)	3/12/1998 5:12:00 PM
From: Czechsinthemail	Read Replies (3) \| Respond to of 95453

007, On the comparison of ESV and MDCO: Mostly my view is based on the PE differentials in trailing and projected 98 earnings. On that basis you pay about a 10% premium for MDCO. I'm cautious about assuming earnings estimates generally, but especially long-term growth rates, because the crystal ball gets so hazy. I'm assuming that oil prices will strengthen, drilling will be going full out, dayrates will be strong. Granted MDCO's debt-free balance sheet is more conservative, but I'm expecting ESV's leverage to work in their favor and produce a higher return on equity. Based on the figures I have for book value ($7.57 for ESV and $5.23 for MDCO) ESV has a slightly better Price/Book--3.68 vs 3.94 for MDCO. And ESV has a better Price/Sales ratio--4.86 vs 5.73 for MDCO. I'm also assuming better near term earnings performance for ESV. The estimates I have for this quarter show about 115% EPS growth expected for ESV compared with about 80% for MDCO. For 2Q, they are currently about even 59% for ESV, 61% for MDCO. Beyond that, ESV has consistently beaten estimates. regards, Baird