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

To: RGinPG who wrote (30853)	10/19/1998 12:46:00 AM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 95453

RGinPG; good points & I agree on the laggards being a ''play'' here. In my opinion FGII was such a tremendous Mo-Mo fav' and fell so far after so many rode it up so high; that it had more tax selling to absorb than most... Especially since many ''feel'' that it will rebound strongly; I think it will be a real mover here shortly; in that it may have the highest amount of tax sellers - who later become post-30 day wash sale buyers of allmost any oilpatch stock... food for thought. I think FGII will be a huge success - review their backlog & recent contracts. I just spent the weekend doing nothing but research & watching Baseball ; the laggard Boat Fab sector will surprise... HMAR is a risk play here ! HLX (boats & Fab), CHK (a cash machine!), GMRK(best niche) & maybe TMAR (which I don't follow much) are definite oversold laggards. The Boats are literally the most hated sub- sector of the most oversold sector - a true ultimate contrarian play. FGII however will be a huge 3 year growth stock, From Marine Log magazine, to the research reports I've read - they have a very, very bright future ahead. Also; I can't tell you how many times that I've read both the analysts and the 'ole time Oil Men say that we are set up for both a Rig (aged equipment) & Equipment and capacity shortage when Asia rebounds... if we have a prolonged/continued contraction here. Many major Oil fields are in their decline curve, It is no coincidence that opening up Alaskan & offshore Californian reserves are being considered. The Middle East Reserves were and have been grossly over-stated due to it being to their advantage to do so; since quotas were ignorantly based on a % of reserves... this will be a factor - it would take pages to explain; do research this folks. Also, it is of no coincidence that the Saudi's want US/Oil Major technology to come into their fields as they recognize the spiggot is NOT endless... we could have a very surprising Crude Oil price snap back down the road, under many different scenarios. I have researched the entire weekend - Also; I just got 2 Energy Sector Research Reports (recommend them highly) - Lehmans Bros Energy Conference & Oil & Gas Roundtable with Fadel Gheit of Fahnestock, Michael Cha of JP Morgan, John Herlin of Merrill Lynch & Chuck Strain among others... excellent stuff... FWIW; (because I was asked to comment; My core holds for the long haul... Drillers: RIG & FLC, - RIG for the EPS stability & Deepwater superiority & FLC for the leveraged upside with their newbuilds coming online like a conveyor belt... & CDG acquisition. Not holding (but trading - yes) any shallow or land drillers untill Crude moves and we see mo-mo in those sectors (FLC/CDG gives me coverage) - then perhaps MRL, ESV & RDC, maybe PDE (CHEAP) then BDI PTEN UTI for the dirt drillers... Actually - I like the service upside better than drillers. I actually think that with just RIG & FLC - I have a more concentrated upside that covers the highest return potential in the drilling sector. I keep hearing Waren Buffets quote - on ''Large Concentrated Bets'' ! - few stocks & large holdings... Big Cap Service: RON WFT - nothing needs to be said here, RON the mo-mo fav' & WFT still looking to acquire...both premiere Co's & must owns in ANY oilpatch portfolio imho. Small/Mid Cap Service: GLBL VRC - lead my list currently; both strong niche leaders and recently decimated/oversold big time. BUY ! - maybe the 2 best % returns from their recent bottoms on their untimely blowoffs at the exact peak of investor negativity in the oilpatch - bad, bad timing; but what a buying opportunity ! DRQ CDIS SCSWF CLB CXIPY VTS PGO - must owns for their deepwater, or technology expertise or ''niche'' dominance - all should grow and earn well above sector norms for years to come ! Like HMAR, TCMS as laggards & value plays, more trading plays of of a sector bounce - but not pulling the trigger as yet; also KEG as a highly leveraged acquirer - may really win big if crude moves soon. Like NOI on any dip from here and IIR as well. DO & NE are strong - but I would rather concentrate my bets in the 2 drillers who offer me both ends of the spectrum; RIG for safety and allmost guaranteed earnings and FLC as the huge upside/risk play. I see no reason to own the ''middle'' with DO or NE - allthough DO & ESV may actually be the 2 best companies to be able to weather a worst case scenario extended downturn due to their excellent financial status & performance with huge amounts of cash on hand and low debt. 2 E&P's that are laggards due to being complex turnaround stories & whose financials on the surface scare most away... are EEX & RRC - both will be huge successs - do some ''DD" and mark these 2 at todays prices. RRC may be a huge bounce play for Monday as well, sold off friday on a couple of huge block sells; a recent merger and has big tax loss selling - I think it is over now & the company has committed to a buyback (maybe buying big monday?) and isssued one of the strongest rebuttal press releases I've ever seen in response to a blowoff.... this will be a huge 18-24 month play; RRC could conservatively be a 5 bagger in 12 months and 8 bagger in 24 mos. . EEX is a pure turnaround/make over play - new CEO selling off what many people think are their primary properties; as they are their current cash generators (land based assets) but new CEO is turning them into one of the best Deepwater GOM plays - mark this one as well; They have an interest in the huge Llano field find.... a mess on the surface, but the ultimate ''Diamond in the rough'' I found a small reference from a CEO of an International Oil company looking to move stronger into the GOM who has a great Seismic track record in finding big fields and mentioned EEX as owning ''the best'' GOM deepwater fields of ANY independant - this got my attention real fast.... RRC & EEX would take pages to detail - both worth the research folks ! Like APA SGO as the ''no-brainer'' plays in E&P's - better upside than BR & NBL and APC is the ''gem'' but priced as such... SGO way undervalued and APA is 2nd only to APC imho in the Independants. I like ETP BNO HEC for International plays. WZR COHO FEN as the oversold pure value plays... COHO has Hicks Muse of ''LBO" fame as a major holder here - as an acquisition vehicle ? Like CPE COG PGEI THX as good conservative earnings plays - good upside potential here. EVER is the earnings upside/reserve play - but priced beyond a value play any longer... PZL is an interesting turnaround play as well... Lets talk stockpicking here folks; there is a whole lotta money still on the sidelines, a whole lotta mo-mo money that will follow and with more Fed Cuts to come; with this double bottom in place - this could be a strong leg upward starting. We will need continued OPEC compliance and for Crude prices to move to $16 + for this to be the real deal; but - we still have major upside here just on short covering and returning to fair value imho from being way oversold fundamentally. What's on the shopping lists folks ? - comments ?