3SOF

June 25th, 2007:

Initial video analysis for OIS:

OIS has been doing reasonably well lately. This is a $2.2 B oil services company.

In February 20, 2008, OIS rose 14% with volume of 2.5 million shares. The news out that day was:

• Oil States Announces Fourth Quarter Earnings of $0.95 per Share
PR Newswire (Tue, Feb 19)

According to the following comparison with competitors OIS has an attractive valuation at current levels.

Fundamental Case:

Well, there's my initial analysis above (video) and a more complete and in depth one attached below made by Jefferies & Co yesterday.

Most analysts covering the stock rose their estimates and price targets after yesterday's better than expected quarterly results:

• Oil States Announces First Quarter Earnings of $1.31 per Share
PR Newswire (Tue, Apr 29)

The stock trades at about 10 times earnings, while it grew them by 24.7% over the last 12 months. The Oil & Gas Equipment & Services industry trades at 17 times earnings.

One of the reasons for this discount could be somewhat weaker revenue growth, but in Q1 OIS revenue rose 25%, more than the industry average of 22%, so, if this was the reason, it isn't valid anymore.

Jefferies raised its price target on the stock from $60 to $65. I think the stock has more potential than this, but the TM would be happy with a 30% profit

Technical Case:

There have been some wild fluctuations since the company's IPO back in 2001 @ $9 a share (when $WTIC was around $10) ...



... but the right part of the chart is higher than the left part, so no doubt the long term trend is bullish.

Over the short term, yesterday the stock was about to make a bullish breakout, but the sell off following the FED decision and profit taking didn't allow it:



But I think the bullish breakout will happen over the next few days, the long term trend, positive fundamental developments and still discounted valuation will probably prevail.

Trading Plan:

I was going to put on a very simple 10/5 trading plan, 10/5 meaning: "I'll either gain $10/share or lose $5/share". But it would feel stupid to sell OIS at, say, $45, just due to profit taking or whatever. But, I never said TM strategy is smart ... it is what it is and I'll just keep doing it.

Trading Plan: (for real now)

1. Buy OIS around the open;
2. Take a $10/share profit if possible;
3. Take a $5/share loss, if needed, to protect capital.

Trading plan:


Take profits at $59.93 or else take a small loss at $44.93.

Here is your $10 Dollars David 

OIS Oil States upgraded to Add at Calyon- tgt raised to $56 (49.19 ) 

Calyon upgrades OIS to Add from Neutral and raises their tgt to $56 from $51 saying they believe that the co's accommodations business in Canada will do well despite the increased royalties in Alberta.

Quote from: Garoh on May 02, 2008, 07:32:40 AM
Here is your $10 Dollars David 

OIS Oil States upgraded to Add at Calyon- tgt raised to $56 (49.19 ) 

Calyon upgrades OIS to Add from Neutral and raises their tgt to $56 from $51 saying they believe that the co's accommodations business in Canada will do well despite the increased royalties in Alberta.

Thanks for the information Garoh

I've attached the complete analysis from Calyon Securities.

The "add" recommendation wasn't enough to push OIS higher, though, as the stock is still in consolidation mode. This isn't a fast runner, but there's no doubt the trend is bullish.

Trading plan:

Take profits at $59.93 or else take a small loss at $44.93.

Trading plan:

Take profits at $59.93 or else take a small loss at $44.93.

Lots of volume in OIS, but no changes in the share price or the trading plan:

Take profits at $59.93 or else take a small loss at $44.93.

Trading Plan:

Take profits at $59.93 or else take a small loss at $44.93.

Update:

OIS will be presented at a conference next Wednesday:
Oil States to Present at the Calyon Conference.

After the recent breakout, OIS is up for another new all time high. Friday's candlestick suggests short term upside continuation, but it would be perfectly normal to watch a throwback to the $50/$51 level for consolidation.

The fundamentals look strong, with OIS showing solid and better than expected results, and yet trading much bellow its industry multiples. Here's a quick detailed estimates for 2008 and 2009 from all analysts covering OIS right now and dates of last updates:


The trading plan remains the same:

Trading Plan:
Take profits at $59.93 or else take a small loss at $44.93.

Regards,

Update:

Nice price action for OIS since the last breakout. Volume has decreased a bit, but still high and giving some consistence to this up swing. OIS is reaching our target, a few dollars more and that’s it…

A new research note was published by Calyon Securities, here’s the complete document for download:


I’m changing the trading plan a bit, raising the stop level to $51.30 (profit protection and near the top of the last intermediate range), the selling zone was also changed to $59.50, no particular reason for that, except to put it a bit away from the psychological barrier of $60.

Trading plan:
Take profits at $59.50 or else take a small profit at $51.30.

Regards,

FYI, the target price was reached on 5/21.

Quote from: realcoolhead on May 23, 2008, 07:49:36 AM
FYI, the target price was reached on 5/21.

Thanks realcoolhead
I've just updated the Portfolio (forgot to update this earlier).

Update:

I’m hading a Standby Trading Plan for OIS, which means we’ll have it under the radar for a possible re-entry.

Technically, the stock had a breakout above its previous high right after our first recommendation, that up swing never stopped until now, so this is probably just a normal technical correction / consolidation of the breakout. The most common move now it will be a re-test near the breakout area, which is near the current ascending support as well.

Fundamentals are strong, with OIS trading below industry multiples and interesting prospects.
Another bullish research note was published last Wednesday, this time from Stifel Nicolaus:
– Increasing Target Price; Reiterating Buy Recommendation

So the plan is to buy OIS again near its support level. That price level it’s possible to achieve from a technical perspective and it will be an easy setup where we could use a tight stop.

Standby Trading Plan:
Buy OIS between $51.00 and $52.50.

Best regards,

Update:

Updating our standby trading plan to the ascending support level:

Standby Trading Plan:
Buy OIS between $53.50 and $55.00.

Best regards,