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All,
Not a bad week! My portfolio wasn't up as much as it has been in
previous weeks, but any gain is better then a loss <G>. With the MLT
position I opened Monday, I'm fully invested for the first time in a
long time. I have stock positions in DELL, EGGS, ERICY, HBOC, MLT,
SPF, and U along with LEAP calls on CPQ. I don't have room for
another position, but I do want to pick a replacement in case one of
my positions hits a target or a stop. This week I'm going back to the
oil patch and the oil service group. Oil has been showing signs of
renewed life and the service group has continued their rapid revenue
and earnings growth while their stocks dropped in sympathy with the
big oil companies. I'm going to bottom fish in my favorite group -
the deep water drillers. I like the Rowan Companies (RDC) chart and
numbers slightly better then R&B Falcon and can't help but remembering
that I did well in RDC last summer and fall.
RDC at 20 1/2 was in an intermediate and short term down trend
channel, but it broke out of the down trend channel Tuesday. It
reached an all time high of 43.975 on 11/6/97 and then fell in
sympathy with the big oils to a low of 18.75 on 6/26/98. It rose from
there to its current position. The indicators are showing a bottoming
pattern. The binary wave is negative but rising from a negative peak
a couple of weeks ago. Qstick looks like it is trying to form a
negative peak. The fundamentals are absolutely great
with a Price/Sales of 2.32, A Price/Earnings of 8.89, Current Ratio of
5.19, Debt/Equity of 0.34, 25% insider ownership, annual revenue
growth of 22%, and annual earning growth of 152%. It's earnings
almost grew a $1.00 per share while its stock dropped 50%. Now if big
oils turn and it just keeps up its growth <G>. At least that's what
I'm hoping for. If I close out one of my positions this week, I'll
replace it with RDC. Since I'm bottom fishing, I'll set my stop just
under the last low at 17 3/4. I'll keep it there until there is
enough data for a good short term up trend channel. The initial
target will be the just under the all time high at 43.
I'll send a RDC.GIF chart to everyone on my email chart list. If
you aren't on the list and want on, just yell. The only obligation is
participation in this forum.
Jim
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