Pride International, Inc. (PDE)
An international provider of contract drilling and related services to oil and natural gas companies worldwide, operating offshore and on land.
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low P/E Ratio 7.97
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This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.
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I don't particularly like Pride as a company... I don't think they are the best at what they are doing. This said, mid August 09 Pride:
- Trades below book value (~$27)
- 5 CAPS stars
- Low PE of ~6
- Low debt ratio
I think it's an easy pick... going with the heard and waiting on oil prices to go up again.
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Considering Book value, earnings, and market cap...this should beat the market in 5 years.
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I am betting on oil/energy right now.
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Pride has kept their key worker by changing work schedules and moving people into different positions. Pride is ready for when the oil industry turns around.
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This stock has a low 1 year forward P/E ratio.
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A bargain for an " everywhere" driller.
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Energy demand will grow for years
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Dirt cheap fundamentals with metrics that rival the rimms, amazons and apples of the world while not forcing you into a play that is fraught with huge risk based on fickle customers. Likewise it has already gone from a momentum PE to a value PE whereas the Googs and amazons of the world can easily go from momentum to "value" in no time at all leaving the owners baffled and bloodied after being taken behind the woodshed. The offshore segment is going to become increasingly important to find the limited strategic oil resources of the future.
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Crossing fingers
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Time to load up the CAPS portfolio with oil services and related stocks.
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Consistent growth over the past five years. $130% EPS growth from Q1 07 to Q1 08 and 160% EPS growth last year. Not to mention the demand for this field in the upcoming years. No brainer.
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Pride International operates the a fleet of ultra-deep rigs (drillships and semisubmersibles) - it has 11 rigs that are capable of operating at depths >3000', and 3 more under construction. Drillship rates are in excess of $300K / day - at a 80% utilization, that's $87 million / year per rig. Given the limited supply of these rigs, it looks like it'll be able to maintain its margins for at least a few years more.
Future oil discoveries are likely to lie in deepwater - oil discovery onshore has reached geologic limits.
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Great growth and earnings.
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Whether oil goes to $150 or to $100 a barrel, demand for oil will continue to out pace supply. The oil drillers will benefit from this trend. In addition, it appears that their once cyclical earnings are now becoming more stable, as these drillers continue to lock in long term contracts for their services.

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