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Michael O'Neill  

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  • Apple And Wearable Devices: Moving From A Want To A Need By 2020 [View article]
    There sure does seem to be a lot of people saying how great is 'could' be, and how 'it' might be needed one day etc.

    Is that all because the initial sales projections seem very poor?

    I think we should just wait and see if Apple give us first weekend sales, or if any initial sales projections come through. We'll then get a true idea of how much the public want this.

    I hope it's a success, but time will tell. As for 2020 - I'd love your crystal ball.
    Apr 9, 2015. 05:46 PM | 6 Likes Like |Link to Comment
  • Halliburton - No Bounce Back Anytime Soon [View article]
    @ Author, your article is nonsense!

    I think you have confused yourself with your charts and numbers, and forgotten that HAL is already down over 80%, and they have already cut their workforce by 6,500 jobs. I.e, all the bad news has been totally priced in, sinking the stock far too low. It is now on the rebound.

    And, the fact you 'forgot to mention' the buyout of BHI the World's No.3 oil services business, which will propel HAL into the 'BIG 2' with SLB, giving HAL some $2bn of extra profits and a higher PE ratio means your article should be filed directly into the bin. It is complete nonsense!

    The time to buy is today, with the majors cutting capex in such a dramatic way, and rigs being closed at a record pace, the oil price reversal is underway, from mod-January and is now out of the hands of the Saudi's. It is very likely to produce a $100 plus spike in less than 6 months. This is the reason oil has risen 20% in the last 6 weeks, and why hedge funds are pilling in with bullish bets (3:1 vs bearish bets) of climbing oil prices. With the huge capex cuts the market is fully aware of this, and it will take months to get supply back on line when it starts to dry up. We'll see yo-yo oil pricing but the bottom has been taken out for sure.

    This is what we wrote on January 14th, at the very bottom of the cycle for these stocks.

    "Investing in quality, cash-rich oil stocks, after the huge sell-off offers both safety and huge upside potential.

    We currently rate HAL, a STRONG BUY with a 24 month price target of $124.

    Currently HAL is forecast to deliver profits of $3.1bn in 2015, and BHI is forecast to deliver $1.6bn too. The new combined entity will deliver profits of $4.7bn.

    HAL and BHI have said the merger will deliver $2bn of annual cost savings by 2016.

    Therefore 2016 earnings will be in the order of $4.7 x 10% = $5.17 (as the new HAL/BHI will have stronger pricing power) + $2bn from costs savings = $7.17bn.

    The current market cap of HAL and BHI combined is $57bn. We expect the market will award, low-debt, highly profitable HAL a similar multiple it gives to SLB now that HAL will be part of the newly formed ‘Big Two’.

    A reasonable multiple would be 22 (not it's historical 16), which is the same as SLB’s average. This would deliver a market cap of $157.74bn.

    There will be 847m HAL shares plus 432 x 1.19 converted BHI to HAL shares for a total share count of 1,279m.

    $157.74bn, divided by the share count would therefore deliver a share price of $123.33

    However you look at it, HAL is one of the most attractive stocks out there. The short, medium and long-term gains are excellent, with potential 2-year increases of 200%.

    It is also important to remember that whatever happens to the oil price in the short-term (long term it will rise as demand will increase yearly for the next 10 years), this has very little bearing on HAL. It is mainly concerned with demand & supply, which are both increasing. The oil majors need HAL to get the oil out of the ground, and they have contracts in place for the next 1-5 years for the majority of it’s work.

    Our own thoughts is whatever the political movements bringing oil down at present, the major players, OPEC, US, Russia etc all want a higher oil price, so that will come - it is just a matter of time. If either OPEC cut 3%, or the US, or the Saudi's alone cut 10% of their supply (roughly 1m b/pd) that would send the oil price way back over $100 extremely quickly. Very little action is required and they could take this action tomorrow, next month, or next quarter. When it happens these stocks will whiplash upwards, so it is best to strap in and sit tight today.

    HAL with a 9.0 forward PE will not go lower. It is already dirt cheap and trading for 40% cheaper than it's historical average without any of the benefits of the BHI acquisition. We are not talking about a declining industry here - oil demand is expanding, and we are talking about a world-class, low debt, hugely profitable market-leading company!"
    Mar 4, 2015. 04:06 PM | 11 Likes Like |Link to Comment
  • Baker Hughes Is Worth $33 - $48 Standalone [View article]
    This author should be ignored.

    Look at his previous article bashing SLB and oil services.

    His figures are skewed, distorted, sensationalised, and just make no sense. His analysis is schoolboy and it is clear his articles are trying to sway a position he holds.

    As you can see today the market thinks differently, as SLB. HAL and BHI shares are rising strongly in a falling market.

    These stock represent excellent value and will deliver high double or triple digit returns over the next 12-18 months.

    BHI is a no brainer, if the deal does not go through then the $3.5bn break up windfall is more than two years of their profits at $100+ oil! What an insurance policy!! (The author fails to cover this of course) If it goes through then you get HAL at a 15% discount, and HAL which will enter the newly formed 'BIG 2' with SLB will see a increased multiple awarded by the market.
    Mar 3, 2015. 12:51 PM | 1 Like Like |Link to Comment
  • Oilfield services gains won't hold up as U.S. storage fills, Credit Suisse says [View news story]
    It will be a sure bet in another 9 months Credit Suisse will be raising their price target for SLB back to $137, and probably long after the stock price has already got there!
    Feb 27, 2015. 11:31 AM | 1 Like Like |Link to Comment
  • Oilfield services gains won't hold up as U.S. storage fills, Credit Suisse says [View news story]
    Let's not forget that Credit Suisse are always late to the party, and last to leave. Just the fact of them saying oil service stocks could fall lower should give all bulls comfort it is definitely the time to buy SLB, BHI, HAL and all other cash-rich, low debt players in the space, already down 30-70%.

    As a reminder, CS (and Argus) wrote:- On Jun. 27, 2014, 3:25 PM:-

    Schlumberger pushes higher in after-glow of investor conference
    Schlumberger (SLB +1%) continues to tally new 52-week highs, two days after following a widely praised performance at its 2014 investor conference.

    - Argus raises its SLB target price to $150 from $121 after coming away from the meeting impressed and believing management's assumptions and targets are conservative and very achievable; the firm likes SLB's innovative technologies that will improve efficiency and help retain the company's premium service and product offering in the market (Briefing.com).

    - In lifting its price target to $137 from $120 and raising earnings estimates, Credit Suisse notes the "humility of the presentation... by a company considered to be the best in the industry on many metrics, including management, implies a very different and open approach by the company."

    One minute they raise SLB's price target to $137, calling them "the best in the industry", and 9 months later after a 30% stock price decline they say the stock will fall lower! Like most analysts, they are pretty clueless and can do nothing but follow the herd. Thank goodness they do not advise me. Value investors should buy these stocks at these knock down prices. They are like a coiled-spring and will sky-rocket with any positive news. The oil industry and oil price has now recovered by 20% and has "calmed" according to the Saudi Oil Minister. SLB will deliver excellent 12-24 months returns.
    Feb 27, 2015. 07:39 AM | 1 Like Like |Link to Comment
  • Oilfield services gains won't hold up as U.S. storage fills, Credit Suisse says [View news story]
    Let's not forget Credit Suisse are always late to the party, and last to leave. Just the fact of them saying oil service stocks could fall lower should give all bulls comfort it is definitely the time to buy SLB, BHI, HAL and all other cash-rich, low debt players in the space, already down 30-70%.

    As a reminder, CS (and Argus) wrote:- On Jun. 27, 2014, 3:25 PM:-

    Schlumberger pushes higher in after-glow of investor conference
    Schlumberger (SLB +1%) continues to tally new 52-week highs, two days after following a widely praised performance at its 2014 investor conference.

    - Argus raises its SLB target price to $150 from $121 after coming away from the meeting impressed and believing management's assumptions and targets are conservative and very achievable; the firm likes SLB's innovative technologies that will improve efficiency and help retain the company's premium service and product offering in the market (Briefing.com).

    - In lifting its price target to $137 from $120 and raising earnings estimates, Credit Suisse notes the "humility of the presentation... by a company considered to be the best in the industry on many metrics, including management, implies a very different and open approach by the company."

    One minute they raise SLB's price target to $137, and 9 months later they say the stock will fall lower. Like most analysts, they are pretty clueless and can do nothing but follow the herd. Value investors should buy these stocks at these knock down prices. They are like a coiled-spring and will sky-rocket with any positive news, and will deliver excellent 12-24 months returns.
    Feb 27, 2015. 07:37 AM | 5 Likes Like |Link to Comment
  • Oilfield services gains won't hold up as U.S. storage fills, Credit Suisse says [View news story]
    The time to BUY oil services is NOW, especially as Credit Suisse say no. They have an appalling track record.

    Most analysts of note recommend buying now. Oil demand is increasing, supply is decreasing - obvious time to buy into the rally. Quality oil service stocks are off by 30 - 80% it is futile to try and wait for another $1 or $2.
    Feb 27, 2015. 04:04 AM | 2 Likes Like |Link to Comment
  • Schlumberger - Stick With The Gold Standard In Uncertain Times [View article]
    We agree, SLB is a strong BUY at these levels, some 29% off recent highs.

    They have positioned themselves well to handle the lower capex spending, and have slashed costs to remain highly profitable. They have increased the dividend by 25% and are actively re-purchasing their own stock (Over $1bn in the last quarter at an average price of $91) such is their confidence in their position.
    Feb 25, 2015. 06:49 AM | Likes Like |Link to Comment
  • Schlumberger Remains A Short Amid Oil Industry Contraction [View article]
    99% of analysts and contributors of regard are very bullish on SLB.

    This article deserves to find a home in the nonsense bin!
    Feb 25, 2015. 03:19 AM | 1 Like Like |Link to Comment
  • Schlumberger Remains A Short Amid Oil Industry Contraction [View article]
    Not worth a reply........
    Feb 24, 2015. 03:08 PM | 1 Like Like |Link to Comment
  • Schlumberger Remains A Short Amid Oil Industry Contraction [View article]
    Listen everything in your article is skewed, as you know. Even your graph of Brent oil price does not show the 20% recovery from January.

    If you want to 'make up' a thesis to short SLB that's unto you. I just hate silly advice that may cost novice investors a lot of money.

    SLB is clearly a stock to BUY and not short.
    Feb 24, 2015. 01:37 PM | 2 Likes Like |Link to Comment
  • Oil Prices Finally Find Some Support [View article]
    Solid article. We agree the bottom has been found and we may see some further see-saw price action but you are right, the solution to low oil price is indeed low oil prices.

    It is the reason for such huge capex cuts, which will ensure demand outstrips supply forcing the price upwards. The oil majors control this market more than the Saudi's and they are not happy with low prices. Period.

    Low prices quickly cut supply, just look at US rigs counts dropping at an alarming rate.

    Low prices also quickly make consumers feel less careful about energy savings and consumption leading to an extra increase in supply.

    The danger at present is not further price falls but a huge oil price spike to $125 or $150 later in 2015, once the ramifications of the capex cuts start to materialise.

    Your recommendations of XOM and SLB are sound, but we prefer European oil majors such as RDS.a, and FP which are cheap, and we'd add HAL and BHI.
    Feb 24, 2015. 12:34 PM | 1 Like Like |Link to Comment
  • Schlumberger Remains A Short Amid Oil Industry Contraction [View article]
    "What part did I not agree with?"

    The whole premise of your article is to recommend shorting SLB. Which you keep repeating in the article giving a reader the impression you have the ability to give your recommendation some level of value. Nothing more than sensationalism.

    - You also miss the main elements showing how confident SLB are of their future.

    - You fail to understand that layoff's make these companies lean and far more profitable long after the oil price has recovered. HAL & BHI said they would save $2bn a year, that's $2bn a year more profits. The layoffs were expected. It's a reason to buy the stock, not sell it, and certainly NOT to short it.

    - You fail to recognise lowered estimates are already baked into the share price.

    I am sorry but your article is a nonsense thesis to shorting, and anyone following it is likely to be severely burnt financially.

    This is very poor advice to give, and very dangerous. From your last article in mid Jan SLB's shares are higher by 13%. You seem to be writing another article to to support your first article, contrarian to the fact that the oil price and stocks have corrected due to huge capex cuts and the realisation the drop was totally overblown.

    After all oil demand has not gone away. Infact demand has risen over the past 6 months, and will rise further over the next 6.

    Shorting SLB, after oil has bottomed and the stock has been so beaten up is not a very wise investment decision, or sensible investment advice to give. Any news of a supply shortage will see this stock sky-rocket.
    Feb 24, 2015. 12:11 PM | 3 Likes Like |Link to Comment
  • Schlumberger Remains A Short Amid Oil Industry Contraction [View article]
    @ dealraker

    oops typo, it should have read

    "Further it re-purchased over $1bn of it's stock at an average price of $91"

    They would have been expensive stocks!
    Feb 24, 2015. 12:04 PM | 2 Likes Like |Link to Comment
  • How To Play An Oil Services Rebound [View article]
    @ Author, a good article.

    We we agree it is best to buy the market leading firms that are cash rich, low debt with rock solid balance sheets. SLB and HAL clearly fit the bill, but we would also add one other name: BHI (the 4th largest holding in the fund), especially considering the additional premium you'll enjoy owning this stock and gaining access to HAL shares from the upcoming merger at a 12% discount.

    BHI also recently beat estimates by 39%, and cut it's workforce by 7,500 jobs ensuring it will remain competitive and profitable through the downturn.
    Feb 24, 2015. 12:00 PM | 1 Like Like |Link to Comment
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