To: SJS who wrote (3100 ) 9/19/1998 9:19:00 PM From: Thean Read Replies (2) | Respond to
Steve, I followed BDI's price movement ever since it went public but fundies-wise I know nothing more than they were a spinoff of Chekesspie <sp?> and a land driller with between 60-80 rigs (as of 6 months ago anyway). It came out near the peak of the last summer bullrun with a PE that was even more bloated than its peers like UTI, PTEN and even GW at that point. Even today it still have a trailing PE of 15 while PTEN and UTI's PE's are 7-8. Remember GW used to have an extraordinary high trailing PE as well when it was trading at $10. Today it is less than $2 and with a more decent PE now. BDI is still paying its due as far as I see it. Overall, the land drillers still have declining jobs on a weekly basis and they should not partcipate in any rebound as nicely as their offshore peers. In the recent rebound, we have seen the greatest strength in the deepwater drillers, followed by the service companies (include FGII here), then the shallow water, then lastly lands (except NBR for its namesake probably but not PDE). Therefore, if oil is pushing $15, $16, and $17 in the next few weeks or months and everyone believe the worst is over, I would be interested in buying the land drillers as I suspect they will be the last to participate fully in a speculative expectation of positive improvement (but first to fall in a negative environment). Depending on BDI's price and its projected PE versus its peers at that point, I may consider. However, GW, PTEN, and UTI should lead the charge in terms of percentage price increase in the scenario of a bullrun if I were to guess today.
