Is Hercules Offshore, Inc. (HERO) a good long term buy in the shallow water drilling sector?
- 1 decade agoFavorite Answer
It is an OK investment. It is in a quality sector, that has great growth prospects; its PEG is also amazing. however there are several negatives:
1) It has been declining since may of 06, in that time oil has gone way up. obviously it doesn't move with the commodity.
2)anthing offshore (especially in the gulf of Mexico) is subject to getting hit by hurricanes (which are supposed to intensifiy in the coming years).
3) it is selling at basicly book value. this could mean several things: 1-the market is missing a VERY undervalued stock. 2-it is very risky. 3-it is a horrible company that has a decent chance of going under.
I don't know about the quality of its reserves, how the management is or its growth prospects. however from the raw numbers it does not look great. if you are looking to trade oil I would go with Hess (HES). if you want to trade offshore oil I would go with Noble Energy (NBL).
- Ron BerueLv 61 decade ago
No buy, sell or hold recommendations.
I JUST checked HERO. It's trend has been. channeling down for the past 2 years between $20 to $35.
It closed today at $22.22. It passes my minimum volume rule of at least 400,000 shares/day.
You might be able to short it or buy Put options.
I JUST looked at NBL. It closed at $69.42 with Bullish charts. It declined the past few days. It also passed my volume rule.
Thanks for asking your Q! I enjoyed answering it!
Yes, that is my real last name!Source(s): My wonderful family! My wonderful coaches and mentors! TWO  of THE ABSOLUTE BEST, MOST wonderful trading groups in the world, which I am most proud to be a member of! Trading stocks and options more than 2 years. "THE University of Hard Knocks"
- 1 decade ago
The reports look favorable. It would be a good time to buy as the stock hasn't sold this cheaply since 05, shortly after introduction. Quite frankly there are not too many petroleum exploration companies I would'nt find favorable, providing they show stability.
- 1 decade ago