Bolt a Buy, Noble Grows Profit and Margins

Added another 200 shares of Bolt Technology (BTJ) as it fell to $40 yesterday - what a ride in this name. This takes the position up to 1.5% of the fund.

On a related note, driller Noble Corp (NE) hit a home run on its earnings, making me feel even more confidant of my recent foray into expanding the fund's position in the deep sea oil drillers. Noble is an offshore driller so it actually has more pricing risk than the deep sea oil drillers, so if they are doing well, it can only mean good things for those with more pricing power.

Profit in the third quarter was $318.3 million, or $1.18 per diluted share, with $207.2 million, or 76 cents per diluted share in the same period a year earlier.

"Improved margins across the Noble fleet, driven by higher dayrates on several recently contracted rigs, provided momentum for a strong third quarter," Williams Sears, the company's interim CEO, said in a statement.

In the 2007 third quarter, Noble's average daily lease rate for its rig fleet rose to $147,501, up from $102,824 in the same quarter a year earlier.

Nuff said.

Long Bolt Technology in fund; and in personal account

Comments

[pprimo]

Look for Noble to establish a new upleg in price after a long consolidation. One catalyst for this will be the resumption of share buybacks due to start around the time of the release of the 10-Q as stated by Bill Sears in the conference call.

My target for this next upleg should bring the price to 63-67. The questions surrounding the CEO's abrupt departure have been addressed. That was holding the stock down, creating a divergence with RIG/GSF that I expect to close. The drillers have held up well in a tough tape even increasing several points during several hundred point drops. I like what I see.

Oil collapsing is the most worriesome aspect here. Although the market is increasing realizing that these long terms contracts are not dependent on the price of oil. The costing of the drilling projects by the customers are done on 43.00 oil.

With the Major Oil companies production declining, they are expected to more aggressive in the drilling programs to help replace the increasing losses of access to NOC's reserves.

[pprimo]

Nice, overlay of charts shows the gap with GSF/RIG closing quickly.

up 6% in one day. Now, just waiting for buybacks to kickin. Maybe that was a contributor to today's action.