Seahawk Drilling (HAWK)

ACMIP (99.67) Submitted: 9/15/2009 2:07:07 PM : Start Price: $30.17 HAWK Score: -29.28

HAWK, in typical spin-off fashion, has come under significant selling pressure from PDE shareholders who are not interested in Seahawk for a variety of reasons (most of which have nothing to do with the value of the underlying business) including - differences in core business activities, cyclical recession within the industry, by-laws prohibiting ownership of small cap companies, index funds forced to sell non-index stocks, etc.).

Essentially the combination of this heavy selling for un-economic reasons coupled with the fact that the nat gas E&P industry as whole is suffering from a severe recession, has created an interesting opportunity for bargain hunting investors.

HAWK is currently trading hands at a slight premium to my conservative estimate of liquidation value (i.e., odds of permanent capital loss are low) - and assuming nat gas prices rebound at some point (which I think is a matter of when, not if) - the upside here is tremendous. A rather attractive combination in my humble opinion. My guess is that investors who get in at or around today's price are likely to do well. Outperform.