tag:blogger.com,1999:blog-2335748440449035592.post2492414056235004389..comments2008-05-09T12:28:11.898-04:00TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-2335748440449035592.post-43788295716013893892008-05-09T12:28:00.000-04:002008-05-09T12:28:00.000-04:00overdue for a sell off in the group<BR/><BR/>just sitting and waiting with cash for now.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-31921512682657041262008-05-09T12:14:00.000-04:002008-05-09T12:14:00.000-04:00My comment on the low PEG was more sarcastic than anything else. Yes, I agree, that the perception that oil tanks, and sends these stocks down is there. That being said, it is why it will be a slow mover in the group.. not going to really pop with oil - not that it hasnt done really well already. But as long as oil remains high, I think the PEG S-L-O-W-L-Y moves up. <BR/><BR/>that being said, I took off my starter position in ATW this morning. I just dont like how oil looks so toppy to me, and these drillers will get hit. I still have RIG, however, but at very low exposure. Every time I see the commodities group sell off (like today - finally - CLF is off!) I get my hopes up for something deeper. But it doesnt show up.Risk Manager Jeffhttp://www.blogger.com/profile/14994763012317049832noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-57899980088295174992008-05-09T09:21:00.000-04:002008-05-09T09:21:00.000-04:00Hi guys<BR/>You did discuss some of the reasons<BR/><BR/>First I never said I did not like RIG. I owned GSF in the fall. Further some of your PEG ratios and the like are "now", not when I bought ATW in the fall. I also prefer the smaller company when given based on the takeout potential. And when I looked in the fall ATWs rigs were outside the Gulf of Mexico, mostly in Asia if I recall. Last, ATW has more of a deep sea profile than either GSF or RIG which had a lot more jackups and the like.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-22648882124935292372008-05-08T23:38:00.000-04:002008-05-08T23:38:00.000-04:00i tend to think that the PEG in this group is hinged on the fact that the perception is its a cyclical sector and that if oil trades way back down (as mark pointed out) that they won't have the earnings growth.madhatterhttp://www.blogger.com/profile/09190401467783694097noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-40810641451295032752008-05-08T22:33:00.000-04:002008-05-08T22:33:00.000-04:00I actually like RIG more than ATW aswell (seems to be trading slightly up now); I think the economies of scale really work in its favour, but anyways, I used the same growth rate for both companies on their '09 numbers and came up with a slightly favourable RIG PEG. <BR/>That being said, they do trade very close to each other in price and valuation. I think ATW tends to get a slight premium as its a take-over candidate to get into this 'monopoly' market.<BR/><BR/>The real question, is why are both trading with such tiny PEGs?Risk Manager Jeffhttp://www.blogger.com/profile/14994763012317049832noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-80110001401068649952008-05-08T20:46:00.000-04:002008-05-08T20:46:00.000-04:00RIG didn't really move on its blowout quarter either (the big moves before earnings essentially priced in the reports).<BR/><BR/>and, speaking of RIG, i'm curious as to why you don't seem to like it in the space? I personally think their merger with GSF makes them the obvious play due to their 'monopoly' (and i use that term very loosely) of the deep water space.<BR/><BR/>ATW<BR/>mkt cap: 3.37 billion<BR/>pe: 21.6<BR/>fpe: 10<BR/>peg: 0.44<BR/>operating margins: 41.7%<BR/>return on equity: 21.5%<BR/><BR/>RIG<BR/>mkt cap: 50 billion<BR/>pe: 11.1<BR/>fpe: 9.4<BR/>peg: 0.31<BR/>operating margins: 46.3%<BR/>return on equity: 32.2%<BR/><BR/>so, the way i see it is you're paying up in terms of valution for ATW's growth since they're much smaller than RIG. but, RIG still has a better peg despite being the larger of the two. Their margins and roe are better than ATW's, and they've been accelerating.<BR/><BR/>don't get me wrong I like ATW too and this might not be a totally fair comparison given the companiess market cap difference. but, RIG seems to dominate them up and down the board, not to mention their deep water rigs have very little gulf of mexico exposure and are mainly international. let me inside your head on this one, i'm confused. just like ATW's growth prospects more? did i miss something and are ATW's dayrates rising more on a % basis than RIG's?<BR/><BR/>*scratches headmadhatterhttp://www.blogger.com/profile/09190401467783694097noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-87291007990540358002008-05-08T19:09:00.000-04:002008-05-08T19:09:00.000-04:00ATW is not exactly a stock known by retail. I think maybe 10 guys who are not institutions own it. So why should institutions run it up after hours ;) It's just a quiet sleepy stock that no one notices.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-35671457564520581982008-05-08T18:45:00.000-04:002008-05-08T18:45:00.000-04:00ATW isn't moving after hours, which I think is a little strange. I also thought it was a good beat at first glace, on rev and on margin.Risk Manager Jeffhttp://www.blogger.com/profile/14994763012317049832noreply@blogger.com