Saturday, December 02, 2006

Helix Energy (HLX) take or "Can we rely on insiders' transactions"

First - confession.
No, not that "I don't know anything about market" - I do know "something" and constantly learning, the day I will place my last trade I still will be learning something new about market, because the moment I stop learning and say "I know Market" - mighty Mr. Market WILL send me to the poorhouse. I was broke before, but I don't want to be poor.

But the truth is - I don't know ANYTHING about OIL and OIL SERVICES, "nada".

That is why I'm glad that mj76 from TagBoard asked for my opinion on (HLX)
May be because I posted "reversal alert for (SUF) since they have something in common, no, not just "oil" word, but ...

Let say that as funny as it sounds: "UNPROFITABLE" oil.
What am I saying, everybody will be laughing at me - let me rephrase:
"Hard to get or hard to process oil" - hmm.. slightly better.

Helix Energy specializes in servicing oil fields just like that - remote locations (deep water) or with exhausted main field.
( Speaking of (SUF) - they provide/ still in the process of testing of "Sonockracking" technology to help increase output of usable oil )

What do I know about Helix?
Cramer does not like it. Who is "Cramer" - the guy who claims he made so much money on his stock picking abilities that he does not have to work anymore? Verdict - ignore Cramer's opinion for particular stocks, case dismissed.

Fools ( that is "Motley fools" ) like it - unfortunatelly MFs had less then impressive track record last few years. Are David and Tom still the ones who make "David and Tom" stock picks?

Merrill likes it? Lehman don't Goldman loves it?

Since when ANYONE cares about YOU, individual investor, especially "free caring"?
Or paid "investing / trading newsletters" - why do they SELL newsletters instead of MAKING MONEY on stocks they promote?

My friend came into my "trading office" on Nov 17th 2006 very upset and started to blame me ( in a "friendly" way ) for misleadingly telling him on Nov 5th that oil has bottomed and it is time to buy into oil and oil services again and now, he says, oil took a plunge yesterday and his wife does not like him.

What struck me as very odd was not that his wife does not like him ( I would not either ), but what for some people looks like disaster ( my friend ) for others proves that they were right earlier, of course I was able to see Nov 17th as exhaustion day ( prices did not really go down that much, but the volume was huge!)

And I did not need to know anything about oil, and as I admitted I still don't know much.

Back to (HLX)

Missed earnings estimates on 10/31 - no big surprise there I guess, did they warn on
9/29 or 9/30?

Float 86M - not to my liking, but not bad

Institutional ownership 84.6% of float
- hmm.. they call it "grows stock". I can agree it is a grows company, but how stock will maintain its upward PPS move for extended period of time if big money almost finished to "load the truck" (Should not have touched TV remote on Friday the 13th at 6:23PM - CNBC popped up on the screen, I'm asking for forgiveness of trading Gods now )

Gross margin, price to sales, PE - yada-yada-yada...

CHART - now we talking - very nice move last 10 days!!!
Wait - dismiss my admiration for the company's stock move in the difficult time for oil - OIL (USO) MOVED UP last 10 days! Well, still a good news - it is not lagging, but
when (HYDL) and (BJS) started to move up even BEFORE oil bottomed and (HLX) just followed reversal in oil prices, tho outperformed in terms of PPS gain due to oversold conditions ( 23% vs about 7% for peers), it makes me worry some.

It makes me even sadder when I see "off the bottom price" move
(HYDL) is up 50% off lows on 10/05/06
(BJS) is up "only 20% off lows on 10/05/06 ( but it never lost as much as HYDL or HLX)

NOW I'll try to answer main question - about "large(st) insider purchase"
I presume we are talking about Mr. KRATZ OWEN who bought 700000 shares for total amount of $2,082,500 on Nov 17th

BRAVO! He MUST know something or he is a greatest trader alive!
Hold on a second!
Let me take a look at his transactions

"3-Jan-05 29,759 HLX Acquisition (Non Open Market) at $0 per share."
in today's PPS of about $37p/s he's got $1,071,684 of free money - not bad

"13-Jan-05 60,000 HLX Option Exercise at $18.06 per share.
(Cost of $1,083,600)"
more free money, with a PPS about $20 at that time it is about $1.2M in the pocket, BUT - it makes him look really dumb and not "in the know" about company business prospectives - PPS went up OVER 50% during next 2 months, "great" trade - missed $600,000.

"7-Oct-05 55,000 HLX Option Exercise at $19.63 per share.
(Cost of $1,079,650)"
with PPS of $29 it puts another 1.6M in his pocket - not bad, BUT PPS goes up another 50% during next 3 months!!! He misses $800,000 - he must know something about company!

"3-Jan-06 44,250 HLX Acquisition (Non Open Market) at $0 per share."
in today's PPS = $1,637,250

"1-Mar-06 628,463 HLX Option Exercise at $9.32 - $13.38 per share."
that puts another $23,881,594 in his pocket and as usual he misses extra $6M run for the next 2 months.

"3-May-06 15,000 HLX Purchase at $40.08 per share.
(Cost of $601,200)"
PPS immediately plunges to $30 in 2 months thereafter - GREAT TRADE!!!

"4-May-06 15,832 HLX Option Exercise at $9.32 per share.
(Cost of $147,554)" Now that IS a good trade - market falls and takes HLX with it
Anyhow - another nickel in the packet - just about 700,000 in the packet

"15-May-06 10,000 HLX Purchase at $39.15 per share.
(Cost of $391,500)" "stock is VERY cheap now, time to buy now" - never mind loosing another $10 next month.

Now, that final "big insider purchase"
17-Nov-06 70,000 HLX Purchase at $29.75 per share.
(Cost of $2,082,500)

So out of about $26 millions dollars he's got out of listed transaction ( I'm curious - how many options he's got left?), he makes 2M purchase - big stinking deal!

Sorry, but for me he looks like a "Bad trader - selling in fear" and "Not in the know" insider "buying in greed" - DISREGARD "big insider purchase"

Back to the chart, now this is what I think about STOCK PRICE action:
It is at a slight resistance right now at $37, if it does not make it ( I think it will make it ) it will look like it is forming descending triangle.

Next more important resistance is $38 to $39 area, IF it makes through and thereafter through $40, it'll go to $43 - and I think it'll stop there.

$65 Price Target? I hope those "analysts" bought (HLX)

(I'm curious if someone wandering if "DT" stands for "Dumb Trader" - I will NOT answer THAT question :)