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Noble Corp. Message Board

  • info_seeker_98 info_seeker_98 Jun 8, 1998 1:04 PM Flag

    Time Frames Keep Slipping Out

    Other posts are more active than this one. I
    bought NE at a low price as a hold, but it is
    approaching my purchase price again!
    I figure the
    institutions don't want to show this stock in its portfolio as
    of end of second quarter. OPEC has lost all
    credibility. There will be no quick recovery in pricing now.
    The good news is we have already suffered through 6
    months and in another 18 months it should be back above
    30! Oh well my heirs will benefit from this!


    This is such an excellent company with excellent long
    term prospects that it baffles me why no one wants it.
    The PE is compelling.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Somebody has you sold.

      It is a contractor,
      with limited ability to grow earnings.
      It is also
      limited by people, as those that know how to operate
      their rigs are old and tiring. They just want to cash
      in one more time, on the options.

      Good
      luck.

      Remember, NE was NDCO, and sold at 2 5/8 just 6 years
      ago.
      I bought below 5, and sold last year.

      Those
      rigs are not made of titanium. Do you know what their
      lifespan is? Think about it.

      • 1 Reply to Box7
      • Re. Lifespan, not made of titanium, etc. All
        true, but the more rigs depreciate and the more rigs
        that are removed from the available pool thru
        attrition, the scarcer the supply. This will translate into
        higher day rates and utilization rates eventually. So
        your statement about limited ability to grow income is
        only partially true. Day rates can rise another 50-60%
        from current before the market could support
        significant new building. My view of drillers is that you are
        not only buying a potential revenue stream, you are
        buying part of a dwindling pool of capital assets. It
        may not work for every investor, but it works for me,
        particularly with contractors in the offshore segment, where
        the asset base is relatively small vs. land drillers.

    • I don't understand it either info. This company
      will have earnings growth of appx 80% in 98' and
      between 60 and 73% in 99' depending on what forcast you
      follow. The debt to equity ratio is very low ( .12 ) and
      it has one of the higher profit margins of the
      drillers ( 37% ). Apparently it has allot of contracts for
      its rigs for some time to come.....this helps make
      earnings more predictable. So with all this solid
      foundation the stock goes down in a bull market that needs
      value......if this company was associated with the internet
      instead of oil the P/E would be atleast 5 times its
      current level. Who ever said the market was rational ?
      I'm sticking with NE. The fundamentals are as good as
      ever and that is why a bought it. Sooner or later
      value will mean something and investors will realize
      that oil is a finite resource.

      • 1 Reply to CoolEdwin
      • <<Who ever said the market was rational ?
        I'm sticking with NE. The fundamentals are as good as
        ever and that is why a bought it. Sooner or later
        value will mean something and investors will realize
        that oil is a finite resource. >>

        Oil
        prices and supply/demand.

        If the fundamentals
        keep going the way their going, these drilling
        contracts will eventually evaporate and the earnings with
        them.

        Check the
        trend
        http://oilworld.com/1cashpet.htm

        and the forecasts I see show it dropping for the rest
        of the year. As a matter of fact, I can't find
        anyone who will say that prices will increase this year.
        They will definitely improve eventually, but maybe not
        this century.

        BUT, having said all that, if and
        when prices improve, this sector will take off like a
        rocket. I jsut don't know if I can stand the pain between
        now and then. I'm long but am seriously thinking
        about bailing out until I see some better news in the
        oil markets.

        Regards,

        BB2

 
NE
31.76-0.24(-0.75%)Jul 11 4:01 PMEDT

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