A good ipo for Monday - CalDive and Teekay

Discussion in 'Stocks' started by eagle488, Dec 10, 2006.

  1. http://www.msnbc.msn.com/id/16140704/

    I dont think its a coincidence that Caldive is pricing tommorrow just after the US Congress opened up 8.3 million acres for off-shore drilling in the Gulf of Mexico. I have not gone through all of the filings to see if my suspicions are correct, but I am willing to bet money that there is some Congressman who has their pocket in this ipo. Its not against the law for Congressmen to trade on inside information and I dont believe they have to disclose their holdings. Earlier on in the year, there was a bill to ban such insider trading, but Im not entirely sure if it went through. Correct me if I am wrong on this one.

    Im not going to simply jump into it as you never can tell where these IPOS will go. I would prefer to wait a few days or weeks to see where they go. Of course there is the initial unpredictable pop and then a leveling out.

    Once it levels out, then I am certain it will be upgraded by analysts in the weeks to come especially with the new opening of 8.3 million acres of off-shore facilities.

    Caldive is actually a spin-off from Helix Energy Solutions:

    http://www.helixesg.com/about.html

    http://www.hoovers.com/cal-dive/--ID__150502--/free-co-factsheet.xhtml

    "Cal Dive International may or may not be California dreaming, but its waking hours are spent beneath the waters of the Gulf of Mexico. The subsea contractor operates a fleet of 23 surface and saturation diving support vessels and three shallow water pipelay vessels. It installs and maintains offshore platforms, pipelines, and production systems on the Outer Continental Shelf of the Gulf of Mexico, as well as in offshore markets in the Middle East, Southeast Asia, and Trinidad. Cal Dive also provides shallow water diving services and performs salvage operations on abandoned fields. Following its IPO, the formerly wholly owned subsidiary of Helix Energy Solutions will continue to be controlled by that company."

    Another company which might benefit is Teekay Offshore Partners.

    http://www.teekay.com/

    They operate about 40 shuttle tankers which carry oil from offshore to onshore facilities, 856k barrels a piece. The key to Teekay is that their fleet is between 6-8 years old whereas the average life of a ship is usually about 25 years. They wont need to replace any ship in their fleet for a long while.

    While this company does not operate in the Gulf, I fully expect for them to be looked at favorably for contracts. They are the world's largest owner and operator of shuttle tankers. They currently work with more then 20 oil companies and in 30 fields i northwestern Europe to include Apache, PGS, Shell, Woodside and Unocal. Their shuttle tankers are specifically geared to operate in harsh conditions.

    In addition to shuttle tankers, they also operate a large fleet of Afromax and Suezmax tankers as well as several LNG ships.

    While it will most likely take a few years for the Gulf oil fields to be developed, I believe the new legislation will greatly help both of these ipos and the analysts will look favorably down on them in the coming months.

    I especially like Caldive whose parent company has operated in Gulf for over 30 years. They have established connections and know what it takes to get the job done in the gulf.

    As I said before, you never can tell where these IPOs will go on the first day. Nymex had traded up to 152 on the first day and then traded downwards to 115 in the coming days. I would wait at least a few weeks or ideally to the first conference call/analyst review. Usually these ipos will trade downwards until the first conference call where we get a look inside and then the analyst christens the ship with the first bottle of champagne.