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

To: Christopher Loe who wrote (21923)	5/13/1998 11:56:00 AM
From: marc chatman	Respond to of 95453

Hi Chris. I believe money has been coming into the sector selectively. The money has come into the deep drillers (e.g., RIG), which are relatively insulated (at least as far as earnings go) from short term oil price swings due to the longer term nature of their contracts. Money has been coming into many of the equipment manufacturers, which have a heavy backlog of orders (e.g., FGII, RON, EVI, CXIPY, VRC). Money has been coming into some service companies as consolidation plays. You have chosen a fairly mixed bag -- perhaps a couple of laggards. I can't comment on your strategy, because if oil can sustain a higher price, the laggards could outperform the leaders. You may want to take a look at Ron's site for a nice comparison of many of the sector's players. rgdoczzz.home.texas.net

To: Christopher Loe who wrote (21923)	5/13/1998 12:18:00 PM
From: JZGalt	Respond to of 95453

Lastly, any opinion on my investment selections in this sector? I doubled my position in TMAR this morning. I believe it is in the bottom end of an upward trading channel. You might want to check out the TMAR thread.

To: Christopher Loe who wrote (21923)	5/13/1998 1:10:00 PM
From: Czechsinthemail	Respond to of 95453

Christopher, Welcome to Strictly Drilling. If you like bottom fishing, this sector is like a hatchery. Many have abandoned these companies anticipating low oil prices will ruin the business. On the other hand, their actual results have been very strong and they trade at very low multiples compared both with the rest of the market and their own historical norms. I think you are right that people are trying to anticipate oil prices and rush for the entrance or the exit based on which way they think it will go. Meanwhile, if you pick up shares when they are down, they offer a fairly low risk and high opportunity investment that should unfold over time based on limited drilling supply and rising oil demand. I'm not sure about your thesis that money is not flowing into the sector. I think there has been buying, although perhaps not with the kind of feeding frenzy you might see in Internet stocks. One other thing that should improve things is the expectation of a weakening dollar, which may help nominal oil prices and draw more money to oil-related companies on renewed inflation fears. The Asian situation may not look good at the moment, but the long-term picture should be very favorable for growth in their economies and with it stronger demand for oil. Baird