...I still don't understand the market psychology surrounding the oil sector!
And you think I do? Ha! And again - Ha! In fact, many times on this thread I have posed the same question that you are now asking me, which is, basically: why can't people be reasonable?!? And like yourself, I am constantly moaning about the failure of investors generally to See the Light, to recognize the value of companies like ESV (which I also own), despite their "outrageously positive" fundamentals.
Actually, I am not being quite fair to myself. I have tried to offer explanations, such as: 1) the Good Karma/Bad Karma explanation; and 2) the Fell Syndrome explanation. There is a third -- the Charisma explanation.
Oil service companies lack "charisma," which is possessed in abundance by wave-of-the-future type companies -- internet stocks (Information revolution coming up!!), biotechs on the verge of discovering the Elixir of Youth, etc., etc. Now, if you can't be glamorous (and how can a company named, say, National Oilwell, be glamorous?), you should at least be entertaining, or provocative, or something. You need to create some sort of positive, "charismatic" image for yourself and for your industry.
I am speaking only half in jest. I would suspect that PR plays a much bigger role in the stock market than people generally credit it with. I recall reading the other day a piece about KTEL, in which the author pointed out that KTEL management had really mastered the art -- and the timing -- of the press release. The minute KTEL's inflated stock price began to sag, wham! out management would come with another well-crafted press release, and bam! up would go the price again.
Maybe the oil services industry should start thinking seriously about PR? About getting publicity -- not just waiting for some stock guru to provide it?
As for your stock picks (it is brilliance of course -- I agree with Doug -- not luck), the only one I would quarrel with is ASND. You say it has been an "outrageous winner" for you. Well, clearly you didn't buy it when I bought it(or rather, when my former investment advisor bought it for me, which is one reason I no longer have an investment advisor). For me, ASND was an "outrageous loser," and I wouldn't touch it now with a ten-foot-pole. The others are inarguably solid, first-class companies, but priced too "outrageously" (that word again!) for me right now.
On Enterprise Value. You probably are familiar with the concept itself, perhaps under another name. When you have a moment, please take a look at a description by Randy Befumo/aka Simon Templar, formerly of Motley Fool (gone on, alas, to bigger and hopefully better things). The URL is for the May 15, 1997, edition of "Evening News." Scroll down a bit, and you will see a little essay, "Enteprise Value Encore."
fool.com
You might also check out a free sample of their "industry snapshot" series (it is of the ECM's). Not only is the analysis of the industry excellent (in my opinion), but the figures, ratios, etc. TMF provides feature enterprise value (EV), in various permutations: EV/sales, EV/invested capital, EV/amortization adjusted net, EV/net income, etc., etc.
fool.com
I would really appreciate hearing your thoughts on the above.
jbe
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