Monday, May 03, 2010

BAGAKOAA Supplement May 3, 2010 An oily slick and a twister board.

BAGAKOAA Supplement May 3, 2010 An oily slick and a twister board.

Ok I lied. No Twister boards you dirty minded people, but you know me I am always looking at the other side of the coin. I got whacked this week with Transocean and on an ADR for BP (sorry again Douglas). When you have a situation like this you have figure out the upside for investing. A nice note from The and some homework hinted a few probably short term plays. Do your homework, but here they are.

CLH, Clean Harbors Inc out of Norwell Mass provides environmental, energy, and industrial services in North America. Its environmental services offer technical services and field Services. Technical services provide a range of hazardous material management and disposal services, including the collection, packaging, recycling, treatment, and disposal of hazardous and non-hazardous waste; and field Services offer various environmental cleanup services on customer sites or other locations on a scheduled or emergency response basis. They are up about 9% since the spill and probably overrated, but will play a big role in the clean up. Their fundies point to a 45 dollar stock now selling at 67. But there could be another 10-15% on the upside before everyone see how over valued this dog is. CAREFUL this is true ambulance chasing.

NLC, Nalco Holding Co from Naperville IL engages in the manufacture and sale of specialized service chemical programs worldwide. One of its key products is an oil separation chemical that will be used widely for this clean up. There fundamentals are not bad. They have reduced LTD from 150 million to 2 million and their free cash flow is strong. This 26 dollar stock has 35 written all over it.

NR, Newpark Resources from The Woodlands Texas provide fluids management, waste disposal, and well site preparation products and services primarily to the oil and gas exploration and production industry. This 3.50 cent stock is currently selling for 7 dollars. It’s a dog, but this is a dog show. This could squeak up to ten bucks during this crisis. If you play these gambles, be sure you put some stops under these critters. There is no confirmation that their services have been contracted.

Veolia Environnement S.A. from Paris France provides environmental management services to public authorities, individuals, and industrial and commercial customers worldwide. I could not find any public statements to the effect that it is contracted in the clean up and some of the financials are a little squishy. I could not get a clean free cash flow, so if you get into this do more homework.

HOS, Hornbeck Offshore Services, Inc. out of Covington Louisiana through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels, and a shore-base to provide logistics support and specialty services to the offshore oil and gas exploration and production industry primarily in the United States and Gulf of Mexico. They are up almost 40% since the spill and it is not even confirmed they have been contracted. They are a natural though as their services are needed and they are right there. They 40% bump puts this stock at a fair value. Personally I don’t like the fundies as it would take about 50 years to clean up its LTD based upon current income. I’ll pass

Based in New Orleans, SPN, Superior Energy Services Inc. provides all kids of oil and gas services including domes that could be placed over the well. It has not had much of a pop yet except the 5% jump today. Its net income is headed in the opposite direction of its LTD meaning it’s a dog. This is a 12 dollar stock dressed up in a 27 dollars suit.

That’s all I got folks. Best bet is NLC. I might even grease up with it in the morning.

Salve Lucrum


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