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Strategies & Market Trends : CAVALRY'S SHORT BUSTERS - MAGIC EIGHTBALLS PICKS -- Ignore unavailable to you. Want to Upgrade?

To: Cavalry who wrote (334)	9/13/1998 1:47:00 PM
From: marcos	Read Replies (1) \| Respond to of 1637

Cav, my handle on o&g is not near as good as some others, also the specific companies I know much about are Canadian. Pete Schueler would know more, I think he's an American #reply-5735871 But from a quick glance at xto's 10Q sec.yahoo.com they seem to be able to easily service their debt with their cash flows at this low PoO (check out 'Cash flow and working capital'), and they're also heavy to gas, as opposed to oil (this is good, imho, as the short and medium term outlook is better for gas), with 12,268boe/d and 226,000mcf/d (figure on 10mcf = 1 bbl, so they're about two-thirds gas) Looking at the 5-yr chart, there's no big speculative spikes or dips, just a fairly steady and moderate building of value (they split the stock 3-for-1 in Feb) They file audited financials. They pay a small but regular and increasing dividend. They've been buying back their stock - didn't just say they might - they did. As to the merits of spinning off assets into royalty trusts - their rationale sounds sensible to me, as the business of finding and developing o&g assets is quite different from managing those assets during their producing lifespan, requiring two different kinds of people and aptitudes. Add that to their market cap argument, which is imho more or less true, and it makes sense. Now all that sounds good, but it was only a cursory look, and they could be lying through their teeth, you can never ignore the possibility - maybe they've already run off to R¡o with the working capital. But it looks all right on the face of it. The stock did have a little 1+ run on Friday, and traded 750,000 shares - that may have been short-covering, likely was quote.yahoo.com But here's one point I think is important - the stock looks like a reasonable candidate for a short list of stocks to look into with an eye to longterm investment - unlike the rmils and aznts of the bulletin board jungle. If a person picked up a few shares on the hope of a short squeeze and the squeeze fizzled, he likely wouldn't lose all that much. Also, imho oil and gas is a good area to be edging into right now. You know where there's a major short squeeze coming up? - Gold. Don't laugh - while reliable figures are not available, there are by the accounts of people whose judgement I respect a bare minimum of 2000 tonnes short position, and very likely as high as 5000 tonnes. It's been a great short for a long time, and people got in the habit. Now it's cheap - about half-price in historical average terms - and heavily shorted. 'Days to cover' would be approximately 'A Whole Bunch'. Worth thinking about, imho. Gold stocks provide a high-leverage way of playing the price of the metal. Haven't had time to keep up with your thread here, or with aznt ... maybe later ..... cheers ..... marcos