1) Distrust "back of the envelope" guessers -- although the one who posted on this board sure had the lingo down pat.... Problem is, especially at year-end, accounting is a far cry from "count the cash, add the whatsits, etc." Add to that non-GAAP accounting (DWSN's choice) and some one-time events and they could have reported darn near anything remotely plausible.
2) Watch the tape -- in retrospect, some of the trading down 20-40 days ago probably had the most obvious explanation -- unpleasant though it may be -- possible.
3) Don't get into a relatively thin stock unless you're either prepared to stay awhile or prepared to take a beating.
Forgive me for this beastliness, but it DOES represent a takeaway from what I learned painfully a few weeks ago -- unless you're privy to stuff you probably shouldn't be and have thought through the legalities and moralities of acting on 'em .... BE OUT (if there's an easy way) of a stock the day or night that their earnings come out.... I was NOT with CRZO but was -- whew! -- with DWSN.
I agree with several who are looking ahead, but both for "wash sale" reasons and others, I won't be re-entering 'til after Xmas, no matter what happens before then.... Stock will NOT be a screaming bargain at $25, if later & lower have the value they obviously do!
Don't know Decker's family (I know Black&Decker) and never heard of him until about a week ago. Only loyalty that I have is to the notion of common sense.
I think the dude that ran the Fidelity Magellan Fund (ol'e what's his name - Peter Lynch) had the best advice, which was along the lines of the common sense theory.
He would definitely agree that if the big oil firms are ordered to Washington D.C. to testify before Congress and the part of the outcome is that there will be reinvestment (and exploration was mentioned), then common sense says that companies that will be servicing the reinvestment should benefit the most.
That leads me to DWSN. Where does that lead you? Do you care to share your "high performing" stocks with the rest of the board?
ps. Looks like there was some maximizing (of DWSN share price) going on Wed and Friday.
I will take your gentleman's bet, which I would have done regardless of today's action.
I will also say I would not be surprised to see the stock hit $25 a share before the end of the year. That is the nature of small cap stocks. The question is what will it be at in five years? How about ten? That is the investment period I use. I am 45 and plan on retiring between 55 - 60. What any stock does on any given day is somewhat immaterial to me. Having said that, I hate to give up any gains as once I see a stock up $5 a share, I see that as my money and hate to lose it.
I also see dips as buying opportunities. Let me mention three stocks, MIDD, CRDN and BBBB. I bought a couple of hundred shares of MIDD when it took a small dive and hit my muy in price of $46. Today, the stock is at $79 or so. My biggest regret is that when it dipped down from the high $50s to about $50 I didn't add significantly to my positon. I faced some fear so didn't react as I should have.
BBBB came out as a HG rec about three months ago and jumped a couple of points. I kept waiting for it to dip, which it did once, but I was again to hesitant to buy. Then it announced a deal with Microsoft and today is about $30. I don't want to pay that kind of price, so I wait for a dip. I hope it will have one, but I have also learned my lesson on patience. CRDN is my best stock ever. I bought around $26, then it dropped to $20 due to a single bad quarter, which management had very good explanations for. I bought, then bought again. Today it is about $45 a share and I am up over $30k on it. Your intention to buy if it hits $25 may be right on the money. A couple of down days with Mr Market and you might have the chance to buy it that low, just as I might still have a chance to buy BBBB for less than $24. However, neither of us may have this chance and in five years both will be ten baggers on us.
I see a great quarter for Dawson, though I have some questions which I will address with them next week. I will pass on what they tell me.
Sept 27-Oct. 6 ... 2005! (talk about getting out of one's cave, i.e.,paying attention) DWSN goes from 32 to 25.... 2-4 points down in a see-saw market over the next 4-6 weeks after it's been shown to have next to no pricing power -- NOT a stretch.
Unless you're a member of Decker's family, your loyalty is both misplaced and incomprehensible.
Your duty -- and those of other investors -- is to maximize your returns. If you think DWSN does that, it's you who'll need luck -- probably more than exists in our lovely world.
Be Thankful the "sharp" investors got out (admittedly, as of now, at lower prices than they might have received had they hung tough) 6 weeks ago. I'm thankful I'm in high performing stocks at a time (don't know how long it'll last this month, seriously!) when the pendulum has swung back to "Houston [and I do mean Houston and Midland and Edmonton], we have a problem."
I'm also thankful that you, I and several others on this board alone are thoughtful and not dependent on being 100% right 100% of the time.
All the best.
I am not speaking for saemlb. He (or she) will be able to that much better than I.
But what I will add is companies like Conoco are being pressed by the big boyz in DC to reinvest. One area mentioned (to reinvest) was exploration. This was on all the major news reports 2 weeks ago. Get out of your cave.
This does not guarantee more business to the likes of DWSN, but when it gets to that point DWSN's business is going to be brisk!
The numbers (the end result eps) that were reported were being compared to last year, which was scewed by a deferred tax adjustment of $.28/share. When you take that out, which gets you to "apples to apples", and still keep the additional depreciation of this year the eps is pretty good.
They way you talk it sounds like doom and gloom for DWSN. $2 - $4 drop in price by end of year? Only if oil and NG sink during that time - unlikely.
Downgrade? Are you kidding!!!!! The pros will look at the numbers the same way I did -"apples to apples".
Whatever your mission is - good luck. You'll need it.
You reason well, but I think you miss one V.I.Thing -- DWSN is part of the energy "food chain," and if Conoco (for ex.) sneezes, DWSN gets VERY sick.
Also, I don't think you're right about the number of shares about which you make so much.... Co's like DWSN (yes, they might be a very rare exception) couldn't hold on to good people without making options a HUGE part of their pkgs.
As I say, I expect I'll be able to buy into DWSN near year-end at 2-4 dollars less than today's close; meanwhile, this is too hot an area to be sitting in an "also ran."
Gentleman's bet(s), as they say -- (1) DWSN nabs a downgrade; and
(2) it gets to $25 or less before year-end....
There may be good reasons to hold it even if you half-believe me (taxes ?), but I hope folks other than yourself heed reason and put DWSN "on hiatus."
Not sure who you are referring to as "back of the envelope" guessers but as it turned out, the three analysts following this company ended up being the REAL back of the envelope guessers. Anyone who is paid to follow a company's stock should be intimately familar with their financial dealings. Either the analysts screwed up and didn't estimate the depreciation correctly or the company's management didn't guide them in the right direction by not disclosing the higher than normal capital expenditures in the last quarter. Given that depreciation has been higher than normal the entire fiscal year, my back of the envelope guess is that the analysts screwed up and set the market up for this miss.
Depreciation is a cost of doing business, but it could be considered extraordinary for all intents and purposes (but not accounting wise) when associated with extraordinary capital expenditures. Many institutional and mutual fund money managers put more weight on EBITDA than EPS for this very reason. Depreciation is a non-cash expense.
All good points -- I don't want to bother finding out who was REALLY presumptuous in guessing how many pennies per share would get reported, but s/he seemed to harp on ELEVEN CREWS!
Phooey -- what did it cost to get 'em working? How good were the newbies? etc.... And I should have added another takeway -- per your points.
ANALYSTS -- I'm talking the average, still thoroughly conflicted but less talented because they shouldered (unfairly) lots of blame from PR (and more substantive) disasters going back a couple of years -- are a joke. They especially do NOT fine tune post year-end.... at least partly for legal reasons. And you can count on one or more downgrading -- yes it IS ridiculous but as certain as the sun rising in the east -- now that they've been "blindsided."
Agree with you, wholeheartedly. Sold 40% of my holdings yesterday and remaining 60% today in premarket. Reasonable gain made. Have had three earnings reports on three holdings in last week or so. First, earnings report was good and second was really good. Both prices tanked. I didn't consider these numbers good. Not really bad. But not really good. Will be interesting to see what comes of it today. My best to all the longs.
Even with all the positive things, showing is disppointing. Going from over 70c to 37c, below estimates, is bad. Even subtracting tax benefit, it looks as if earnings basically stagnated. In the hottest period for the industry, one has to wonder. The only hope is that company wrote off a disproportionate part of expences in this quarter, but why would they do that? Only if they kept putting it off - which isn't good. Otherwise, one has to admit that this particular line of oil and gas services/exploration does not benefit as much from higher prices as other companies.