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Tuesday,
March 17, 2009
(Cont'd from
above)...
Jim:
It's an oil service
company that Dan
Fitzpatrick - the
technician who
nailed Big Lots -
believes is headed
higher, based on the
technicals, not the
fundamentals...
that's me...
Now, what do I
think?...
What do the
fundamentals say
about SII?... They
say that, this time,
Fitzpatrick is
wrong!... The chart
is wrong...
The big reason for
the decline in the
stock and the oil
service space was
the pullback in oil,
which created
the feeling that no
one would ever be
drilling for oil and
gas again.
That sentiment has
turned because, even
though OPEC has
refused to cut
production, crude
prices still surged
to $48 a barrel
today... That's very
bullish for the
whole oil complex,
including SII...
But!... That doesn't
mean SII is the way
to play it...
While the company's
deep-water markets
still look good, the
balance sheet is
awful!...
[Please note: This
week, we are making
special exception to
our verbatim rule
for our recaps, as
we are staffed thin
until our main
"recapper" returns
from a much-deserved
vacation. Our full
recaps... yes,
verbatim... will
return this Monday,
the 23rd, for your
use and enjoyment.
Thank you.]
▼ ▼
▼ ▼
▼
 The
Bottom Line!:
This
Smith International Inc.
(SII)
chart may look good,
but its debt
situation doesn't.
Neither does its
North American
land-drilling
business. Based on
the fundamentals,
sell Smith. Swap
into
Transocean Inc. (RIG),
and I think it's a
better, cheaper way
to play the oil
recovery.
[end of segment]
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