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

To: stsimon who wrote (42073)	4/12/1999 9:23:00 AM
From: SliderOnTheBlack	Read Replies (3) \| Respond to of 95453

Okay, they ''stiffed'' me with ''no soup'' on their IPO, but ....this is good ! damn; just when I ''want'' to cancel for not getting any damn IPO stock - they come out with another great article (VBG) - okay Herb G - you got me back..... FLC - buyout ? PZE - first Mike Price, now Gabelli ! - hmmmm 2 great plays there imho....FLC @ $14 - hmmm & the CEO just resigned - hmmmm - get the point ? again; netiquette - a paste deserves a plug: thestreet.com ****************************************************************************** One Money Manager's Favorite Stocks for a Dow 10,000 or 2000 World By Herb Greenberg Senior Columnist 4/12/99 6:30 AM ET <<When we left Jim Marquez of the Bayou Fund, a private hedge fund in Stamford, Conn...... Here's a guy who spends much of his day aggressively trading stocks, yet he saddles himself with.... a whole list of what he likes to call "extreme value" stocks.... These are stocks that have assets or cash and a trigger, such as a restructuring or the possibility of a takeover, that can cause the stock price to rise. But not immediately. For these investments, momentum and growth are irrelevant. "We will readily buy a company with a heavy debt load if that company has assets sufficient to pay off the debt and gives stockholders a premium, even on a complete liquidation," Marquez says. He adds, "For this type of investment it doesn't matter if the market is at 10,000 or 2000." ................... • R&B Falcon (FLC:NYSE): This oil services company recently raised cash through a debt offering. "Turns out they have ample liquidity to get through the next 12 to 18 months," Marquez says. "And even with issuing high coupon debt, they'll have positive cash flow and earnings per share in 1999 and 2000. "The point I want to make is that high debt levels, while not desirable, are okay if the assets underlying the debt are sound. In this case, they most certainly are. And if the stock remains under 10 for very long [it closed Friday at 8 1/16] it will attract a takeover offer of at least $14 per share." He hopes! • Pioneer Natural Resources (PXD:NYSE): "This is Richard Rainwater's biggest company goof in his whole illustrious career." The stock, at 8 7/16, is down 85% from its high. "They over-leveraged the balance sheet at exactly the wrong point in the cycle, and now their bankers are breathing heavy down their corporate neck to reduce bank loans outstanding by the end of the year. "Again, debt is only a problem if your assets aren't good and therefore are not readily salable. In this case, their core assets have some of the finest long-lived natural gas reserves in the United States. The company has a goal of reducing debt by $500 million to $600 million this year, which should be attainable. And they have interesting drilling prospects offshore in the Gulf of Mexico, off West Africa and in South Africa." • PennzEnergy (PZE:NYSE): Marquez and I were talking about this very company Friday when a headline popped up that an investment group headed by value investor Mario Gabelli had bought more than 5% of the company, which was the exploration and production side of the old Pennzoil before Pennzoil merged with Quaker State Oil a year ago to form Pennzoil Quaker State Oil (PZL:NYSE). Even before Gabelli showed up, Marquez told me he believed Pennz was "a cheap energy stock" that trades at a steep discount to its underlying reserve net asset value. Prior to its split-up, the company received a takeover offer from Union Pacific Resources (UPR:NYSE) "at three times over its present price" of 10 9/16. Last week, it so happens, Union Pacific closed a debt deal that bolsters its cash coffers to $1.3 billion. Will it make another run for Pennz Energy? If not, Marquez believes somebody eventually will -- unless the stock rises. >> *******************************************************************************