Dawson Geophysical Company (DWSN)

WickedSmaht (82.51) Submitted: 1/09/07 1:30 PM : Start Price: $31.90 DWSN Score: 27.60

Up, down, up, down... this company bounces like the little ball on top of the sing-along lyrics, bouncing in time with the vagaries of the oil market. If only they actually sold oil.

Yes, demand for Dawson's services will be affected by oil prices, but only if those prices drop below a threshold where further exploration is unprofitable. I don't see that happening anytime soon, do you? In fact, it's counter-intuitive to argue that we are facing a global oil shortage while simultaneously bidding down the price of a company that exists to increase the supply of said oil.

On the company fundamentals side, Dawson has just made significant investments in upgrading its equipment and adding a new imaging team. The new team is now fully operational and contributing to revenue, and the upgraded equipment is expected to increase the efficiency of all teams, further enhancing revenues by speeding up engagements.

My advice? Follow the bouncing ball, watch for oil prices to dip, and then scoop up Dawson when it drops near 30. Then hold on and watch company fundamentals, not commodity pricing, drive this stock upward.

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