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

To: Harold S. who wrote (32414)	12/3/1998 8:44:00 PM
From: John Carpenter	Respond to of 95453

With $30 in sales per share and 6,700 employees, it's amazing that HLX trades near $6(or a market cap of $184,000,000). Clearly, it's a value stock. However, just because the shares are remarkably cheap doesn't give them a preordained right to go up tomorrow, next week, next year, or even ever again for that matter. The market is betting, rightly or wrongly, that this stock is dead money for a long, long, time. The market has history on its side. Look at 20 year charts of SLB and GLM. Oil service stocks can trade sideways or down for ten years at a time. When they do advance, it's usually intense but, lasts for just a year or two. And who can predict when the next boom time will come? 2007 is as good a guess as any. In the meantime you could have invested your money in an enterprise with more consistent earnings growth. So the shares are cheap because the market is saying you're not going to get rewarded right away, if at all- maybe in ten years, who knows. If the market's wrong and we rebound next year, you'll make a killing. But when I look back at the history of this industry along with the realization that Exxon and Mobil are probably not merging because they expect a great year next year or the year after. Unfortunately, for now, I've concluded that the market is right.