I am not into caring about the "value" too much but for what its worth (and what I hear only). The MCE business arena is hot and regardless of what shale, gas, bloody algae or anything else comes into play deep sea oil will be drilled as long as its there to be drilled (always profitable - even if something else is more so - so capital/projects will come). MCE is in a small group (maybe 3/4 players as skc said) and they have 500M on quote. Management is piss poor at updating the market it would appear but they have indicated (I am not sure where this officially comes from but I heard it somewhere (maybe RM on Sky?)) that they expect 30% of that to convert to orders (I do not think they are claiming it can all be converted and quite frankly it does not need to be). Of course, given the size of the competition and the past history this does seem quite reasonable. Also 30% is well enough to be a player.
In terms of the last few months I also think they had some problems converting orders due to limited bandwidth (in a sense they were full up on work and busy trying to expand). If they can't handle the business at the right time in the right way then the customer is forced to go elsewhere (its not necessarily a matter of undercutting etc although this may also be true). They have since increased their bandwidth and may turn some of these existing quotes over more quickly in the future. Again, the past suggests they have about a third of the business in an arena with say 3 players. I think that is pretty good. There is nothing to suggest they are now out of the game either.
The problem is until the stock and market more generally settles down none of this really matters. Its hard to see a prolonged rally. Just short term swings and profit taking is my prediction. Possible to make one's money back if one rode the wave down but not as easy as sitting on the side. I would just like to see a contract announcement and see what happens (seems in the past they never announced them at all). I also particularly like seeing RM flip flop.
In terms of the last few months I also think they had some problems converting orders due to limited bandwidth (in a sense they were full up on work and busy trying to expand). If they can't handle the business at the right time in the right way then the customer is forced to go elsewhere (its not necessarily a matter of undercutting etc although this may also be true). They have since increased their bandwidth and may turn some of these existing quotes over more quickly in the future. Again, the past suggests they have about a third of the business in an arena with say 3 players. I think that is pretty good. There is nothing to suggest they are now out of the game either.
The problem is until the stock and market more generally settles down none of this really matters. Its hard to see a prolonged rally. Just short term swings and profit taking is my prediction. Possible to make one's money back if one rode the wave down but not as easy as sitting on the side. I would just like to see a contract announcement and see what happens (seems in the past they never announced them at all). I also particularly like seeing RM flip flop.
