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

To: SargeK who wrote (39912)	3/14/1999 3:27:00 PM
From: MARK BARGER	Respond to of 95453

For those wondering if Wall Street will wait for earnings before pushing up the prices, again I refer to the amazing comeback by the SEMI industry. Check out the last 5 Qtrs. earnings for AMAT and NVLS. AMAT - .52 .37 .19 .7 .11 (most recent qtr) NVLS - .64 .60 .46 .22 .23 (most recent qtr. 2 quarters ago is when those stocks bottomed around 20 and rocketed to 60-70 way ahead of the fundamentals improving. IMO as we are already seeing signs of demand improving and with OPEC coming to an agreement on substantial cuts, THE BOTTOM IS BEHIND US. OSX will not rocket but I see at least 50% gains in the OSX by the end of the year. Sure, day rates won't be moving up for awhile, but neither will they go any lower. This sector has been crucified. FGI is down from 44 to 13 in the last 9 months, and people think maybe it's time to take a profit!? The stock prices will turn around way, way before the fundamentals even think about turning. The trend is set though. And we still do have a nice little "wall of worry to climb." Good luck to all! Mark

To: SargeK who wrote (39912)	3/14/1999 3:40:00 PM
From: Mike from La.	Read Replies (1) \| Respond to of 95453

Sarge, I agree with you, the factors that you point out are relevant, and effects a block of the investing public. Part of the reason I took the tack I did is because of my perception of how the institutional investors look at things. I think they want at least a recent history of earnings growth, combined with a good prospect for future earnings growth. The deepwater water drillers all have new rigs reporting for duty, with good long term contracts, over the next year. Their earnings so far are good, many of them showing year to year increases last quarter. This includes the related service companies. If oil holds in the $15 dollar area, with upwards growth expected, the contracts coming up for renewal the rest of this year should get good rates. I believe RIG just renewed one last week at a higher rate. The oil companies cannot afford to lose the rigs, that would screw their long term plans for deep water development. Another 3-6 months though, and they would have gotten hit hard. I took a slightly different angle than you, trying to anticipate the institutional investors, rather than individuals. The institutions seem to have a much slower reaction time, because they are more risk adverse, unlike us on this thread, who believe no guts, no glory. We can make more than them, but they put up with less risk. Mike

To: SargeK who wrote (39912)	3/14/1999 3:53:00 PM
From: Gary Burton	Read Replies (3) \| Respond to of 95453

Sarge--Yes, but to reach the Fall/98 peaks, GIFI rises 101%from here, UFAB rises a furthur 54% and FGI rises 41%. To reach the low, GIFI would need to fall about 30%, UFAB about 25% and FGI about 28%....Upside/Downside ratio is therefore 3.4x for GIFI, UFAB 2.2x and FGI 1.5x....Advantage GIFI.......fwiw the same Upside/Dnside ratios from Friday's close for 2 debt heavy drillers: FLC is 4.3x, PDE 1.7x--Advantage FLC-- the ratios for 2 seismic guys VTS at 2.0x and PGO 1.8x--a draw and the ratios for 2 deepwater drillers are RIG 2.4x and DO about 1.0--advantage RIG. The shallow GOM jackup stocks now have ratios of RDC 1.2x,GLM 1.2x,MRL 1.0x ESV 0.9x and NE 0.8x --slight advantage RDC/GLM.