Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: drsvelte who wrote (21662)	5/7/1998 10:32:00 PM
From: jbe	Respond to of 95453

Here's another little article about the oil service sector, suggesting that low oil prices are actually good for it: . Lower Oil Prices Spur Demand For Energy Services (FSESX) Wednesday, May 6, 1998 The fall of the energy services sector in late 1997 coincided with the Asian economic crisis, as did its recent recovery. Ron Rowland says it's debatable whether events that caused lower oil prices are truly linked or just coincidental. The argument for linkage blames depressed oil demand from Asia, while the argument for coincidence cites the mild El Nino winter and overly aggressive valuations in 1997. Though both have their merits, Rowland says the second argument is more plausible. But whatever the reason is, lower oil prices heightened demand which in turn spurred energy services such as exploration and drilling. Analysts say the sector should outperform the S&P 500 by 15-20% over the next six to nine months and valuations are reasonable given projected 14-17% EPS growth, more than twice projected S&P growth. The recent Halliburton/Dresser merger also caused a surge in the sector in March and inspired optimism among investors. To capitalize, Rowland switched his Fidelity Single-Sector Portfolio into Select Energy Services (FSESX) on May 4, 1998. Morningstar reports FSESX's top positions include oil driller Cooper Cameron (Merrill Lynch recently upgraded), Halliburton and Dresser, and Schlumberger (recent good reviews from Credit Suisse and Deutsche Morgan Grenfell). Thanks to a mandate of pure exposure to the sector, fund manager Robert Ewing outperformed his nearest rival by 37% in 1997. But Morningstar's Paul Ellenbogen says FSESX is only for those strongly bullish on the sector: "This fund will get drenched if a storm hits that subsector of the market." For more on Ron Rowland's recommendation see "Sector Trends," May 1998, All Star Funds. Ron Rowland is a leading practitioner of sector rotation investing with mutual funds. investools.com -----------------------------------------------------------