OSX/OIH at All-Time Lows?

Discussion in 'Trading' started by Landis82, Sep 5, 2008.

  1. In absolute terms, the forward P/E of the OSX is trading at all-time lows, -50% below the 10-year average and almost 2-standard deviations away from the mean.

    The current 12-month forward P/E of the OSX is 11.0

    The previous forward P/E trough was 10.8 times reached in January of 2007 when natty-gas was trading at $6.00 Mcf and crude was at $60 per barrel.

    Vs the SPX, the OSX is currently trading at 1-standard deviation below its 10-year average. This is ONLY the 3rd time that this has happened since the OSX first started trading in 1997.

    The first was during the 1998 Asian currency crisis when crude tumbled to $10 per barrel. The second time was during the Dot-com collapse in the Fall of 2001.

    Perhaps with the news of FNM and the end of the recent dollar rally, we will see the catalyst for a rotation back into the drilling sector.

    Food for thought.
  2. dsq


    Oil is at 106 now and was 60 then...maybe the pe can get chopped even more.
    I remember trading global marine(glm) in 97-98.I made some killer coin on position trading.
    The drillers do look interesting.However,the game is different nowadays and i dont know which driller to play.Is there a driller etf?Im looking at hero which has been chopped 50% from july as a play.
  3. dsq


    Insider sales from prior quarter on these drillers is massive...These guys sure knew the bubble wasnt sustainable.They timed it just right.

    hero 21million
    pten 19mil
    ne 13mil
    nbr 3.4mil
    rig 26mil
    nov 23mil