Large options trades can provide clues to make market moves, notes Jay Soloff....
"Firing on All Cylinders"
09/16/2005 12:00 am EST
Mike Burnick is the editor of Elite Stock Trader, an exclusive trading service published by Weiss Research and designed for sophisticated investors. Here, he looks at an oilfield service firm poised to benefit from the rebuilding of the Gulf Coast oil industry.
"As we're all painfully aware, Hurricane Katrina brought wide-spread devastation to the Gulf Coast. The oil and gas industry based in the Gulf was hard hit too, with offshore oil drilling platforms and coastal refineries shut down. Now, these operations are slowly beginning to come back on line.
"One company that stands to benefit from the rebuilding of the Gulf Coast's oil industry is RPC Inc. (RES NYSE). Based in Atlanta, RPC provides a broad range of specialized oilfield services and equipment to both major and independent oil and gas drillers. Just take a look at how well this company has been performing:
RPC's second-quarter sales jumped 19% from a year earlier to $102 million.
Earnings soared 58.8% year-over-year to 27 cents per share from 17 cents a share. And profits in the first-half of 2005 topped $21.8 million, or 50 cents per share- up 64.4% from a year ago.
Cash flow from operations jumped almost 66% in the first six months of 2005 to $32.5 million from $19.6 million in the same period last year.
RPC is rated A+ by our sister company, Weiss Ratings.
"The company is certainly already firing on all the right cylinders, fundamentally. And now that the company's services will likely be called on to help the Gulf Coast energy industry get back on line, I expect its shares to surge. So, I recommend you buy RPC Inc. right away. Be sure to also set a protective stop, just in case the trade timing is wrong. In most circumstances, any loss should be limited to no more than 10% of your investment."
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