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

To: Gary Burton who wrote (39101)	3/6/1999 3:19:00 PM
From: Big Dog	Respond to of 95453

Gary, I think maybe you are trying to look at the picture from too much of a TA viewpoint rather than a "fundamental" view. My point is that the earnings for some companies will be ok as long as the low oil prices don't stay around too long. How to translate that to TA -- I don't know. And I don't believe that certain things MUST happen -- from a chart or technical view. I don't share your view that ALL companies in the industry must be nailed -- eps- wise. FGI great strength is its backlog -- which just went up $143 million. This back log was built on the back of the stronger market that we just came out of. There is considerable lag time in realizing these projects won by FGI long ago. This is a nice cushion. And this cushion will support eps for some time in the future...and that length of time will depend on how long it is before NEW orders start coming in. And that depends on how long before oil prices move and stay higher...which results in more drilling, which results in higher day rates...which results in more FGI-work. Oil prices don't know that FGI's eps has not been devastated yet. I suspect FGI's backlog will start moving down. But remember, the smaller work is the higher margin work. The newbuild rig adds lots of $$$ to revenue and backlog, but the margin is much smaller than the "in and out" work that won't even show up in the back log numbers. But I'm just an ole HoundDog, cryin' all the time. big loosbrock.com