Bronco Drilling Company, Inc. (MM) (BRNC) Share Price

LOL yes you sure did. I would take those prices right now :). I do like it here at these prices. The service field is booming again.

Looks like I did good in hindsight, lol.

timhyma Share Wednesday, September 19, 2007 12:05:29 PM
Re: timhyma post# 4227 Post # of 64143

Sold all my BRNC at 15.99 for a 11% gain overall from the buys on 20 and 30 July

Hitting resistance, and overbought

Bronco Drilling is game to compete in that wild ride called oil and gas drilling, where the chances of getting bucked off are as likely as the chance of making a buck. The contract land driller owns a fleet of almost 40 land drilling rigs. Many of its rigs, ranging from 500 to 2,000 horsepower, can drill to depths between 15,000 and 25,000 feet. Bronco Drilling offers both contract drilling services and well servicing services (such as downhole equipment removal and obstruction removal). The company, which operates rigs in Colorado, Louisiana, North Dakota, Oklahoma, Pennsylvania, Texas, and Mexico, has a fleet of workover rigs to service its drilling rigs.

Thanks Frenchee. Note that they have missed estimates last 3 quarters. So, I would put forward EPS around 84 cents. Competitors are averaging P/Es around 12x, so only comes to $10 on that valuation. Tangable book comes in around $12, so fairly valued here, unless they pull a rabbit out of the hat <bg>.

Looks like the huge double bottom is in Tim...

I'll take a look- this one dropped off my radar a while back.

This stock is cheap relative to its peers...

P/E Ratio: 8.61

P/E Ratio vs. Industry: 52.10%

5-Year Price Performance vs Industry

Next target for BRNC is the lower Bollinger Band on the daily charts shown in the iBox.

sawtooth1,

What's your current opinion on Bronco?

Short-term mo rolling over. A test of 13.5 not out of the question IMHO.

Looks like a double bottom starting to take shape on the weekly charts. With Bronco being so oversold, a short-term bottom could be at hand next week...

BRNC's Street.com rating as of 21 May 07

RECOMMENDATION
We rate BRONCO DRILLING CO (BRNC) a HOLD. The primary factors that have impacted our rating are mixed -
some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a
positive or negative performance for this stock relative to most other stocks. The company's strengths can
be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable
debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we
also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in
the company's earnings per share.
HIGHLIGHTS
The revenue growth came in higher than the industry average of 29.3%. Since the same quarter one year
prior, revenues rose by 39.9%. This growth in revenue does not appear to have trickled down to the
company's bottom line, displayed by a decline in earnings per share.
BRNC's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying
that there has been very successful management of debt levels. To add to this, BRNC has a quick ratio of 2.20,
which demonstrates the ability of the company to cover short-term liquidity needs.
44.90% is the gross profit margin for BRONCO DRILLING CO which we consider to be strong. Regardless of
BRNC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed
results of the gross profit margin, the net profit margin of 14.40% trails the industry average.
BRONCO DRILLING CO's earnings per share declined by 8.3% in the most recent quarter compared to the
same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely
to report a decline in earnings in the coming year. During the past fiscal year, BRONCO DRILLING CO
increased its bottom line by earning $2.43 versus $0.25 in the prior year. For the next year, the market is
expecting a contraction of 36.2% in earnings ($1.55 versus $2.43).
Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BRNC
has underperformed the S&P 500 Index, declining 19.91% from its price level of one year ago. Turning toward
the future, the fact that the stock has come down in price over the past year should not necessarily be
interpreted as a negative; it could be one of the factors that may help make the stock attractive down the
road. Right now, however, we believe that it is too soon to buy.

Hi PennyMaker,

Please put a BRNC chart in the IBox something like:



TIA!

iShares Goldman Sachs Set To Launch Natural Gas ETF
January 28, 2007
by Tom Lydon
Barclay's has filed with the SEC to launch a new exchange traded fund (ETF) tied to the price of natural gas. Like other commodity index funds, the fund is tied to the account of a rolling futures account , with one NG contract replacing the next from one month to another. The fund charges 89 basis points but will be offset by interest income of more than 5% and will list on the New York Stock Exchange reports Matt Hougan for Seeking Alpha.

Natural gas accounts for a quarter of U.S. energy consumption, and with the presence of both oil and natural gas ETFs, interesting cross trades will be created. The iShares Goldman Sachs Commodity Natural Gas Indexed Trust will not be for the faint of heart due to the volatility of natural gas prices, as they are known to jump around, as much as 10% in a day.

Russia and Iran Discuss
A Cartel For Natural Gas
Potential Clout Alarms
Big European Buyers;
Previous Effort Fizzled
By RUSSELL GOLD and GREGORY L. WHITE
February 2, 2007; Page A1

Russia and Iran -- which hold nearly half the world's natural-gas reserves -- are talking about creating an OPEC-like organization for gas, a move that has the potential to unsettle energy markets and redraw geopolitical alignments.

Gas accounts for a growing share of global energy use, but the nations that produce most of it don't work together to influence markets. That's a stark contrast to the oil market, in which members of the Organization of Petroleum Exporting Countries manage output to keep prices at levels they favor.


During his annual news conference in the Kremlin yesterday, Russian President Vladimir Putin said "a gas OPEC is an interesting idea. We will think about it." His comment comes days after Iranian Supreme Leader Ayatollah Ali Khamenei publicly called on a visiting Kremlin official to establish a group of natural-gas producers similar to OPEC. Russia and Iran are the world's largest and second-largest holders of gas reserves, respectively.

While there are several reasons why a gas cartel isn't likely to work as well as OPEC has managed the oil markets, the talk has alarmed big gas consumers, particularly in Europe, which gets a quarter of its gas from Russia. A cartel would be less menacing economically in the short-term to the U.S., which still gets most of its gas within North America.

Still, over time, the market is becoming more internationally flexible as shipments of liquefied natural gas rise. U.S. imports of LNG have more than doubled since 2002, though they still account for a small fraction of gas consumption here. Other Western countries are seeing demand for the clean-burning fuel climb even as their home-grown supply of gas declines. These shifts have turned gas in the last few years from a humdrum commodity into a prized fuel increasingly subject to geopolitical spats.


Comparing gas prices is difficult because until recently, there hasn't been a global market for the fuel. Asian gas-delivery contracts have tended to be pegged to the price of crude oil, while in the U.S., spot gas prices are typically set by trading at a Louisiana pipeline hub. U.S. gas cost between $2 and $3 per thousand cubic feet in the 1990s, but has averaged more than twice that in recent years. A contract for the delivery of gas in March closed yesterday on the New York Mercantile Exchange at $7.54 per thousand cubic feet, up over the past few weeks due to the cold weather.

The prospect of Russia and Iran working together to influence markets can't be comforting for Western countries. While Russia doesn't have the same pariah status as Iran, Moscow has under Mr. Putin faced increasing criticism for using its vast energy riches as a diplomatic lever. Early last year, state-controlled gas giant OAO Gazprom cut off supplies of natural gas to neighboring Ukraine in a pricing dispute that briefly reduced the volumes delivered further down the pipeline in Europe.

Together Russia and Iran hold more than 40% of the world's known gas reserves, according to the BP Statistical Review of World Energy. Moscow has cultivated relations with Tehran in recent years, building a nuclear-power plant in Iran and last year selling it air-defense missiles. Moscow has also resisted efforts to increase international pressure on Iran over concerns about Tehran's nuclear ambitions.

In his remarks yesterday, Mr. Putin rejected charges that Russia uses energy as a political weapon and he downplayed any price-fixing rationale for creating an OPEC-like structure. "We do not intend to set up a cartel, but I think it's right to coordinate our activities," he said, "bearing in mind the key goal of absolutely reliable supplies to the main consumers of energy."

A previous effort to create an organization of gas exporters fizzled, and many are doubtful this one would succeed. The Gas Exporting Countries Forum, which included Russia, Iran and Qatar, was formed in 2001 but hasn't met since 2005. "At the moment, they haven't gotten it together to even meet, much less coordinate anything," says Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies in Britain. As for talk by Russia and Iran of a gas OPEC, he says: "I'm unexcited by it."


It isn't known exactly how a gas cartel would operate, but OPEC has been a huge market force for decades. For a period in the 1970s, OPEC members set prices for their oil, and Western countries paid up. But oil demand eventually fell because of the high prices. In response, OPEC started cutting back output to influence prices and let market forces do the rest. That is still the strategy it employs today: In recent months, alarmed about falling oil prices, OPEC announced production cuts totaling 1.7 million barrels a day.

Talk of creating a gas cartel appears partly to be an outcome of dissatisfaction among gas suppliers with the emerging international gas market. After investing billions of dollars into boosting output over the past five years, "it's difficult to place all of this gas in the market at a price that they're comfortable with," says Ira Joseph, executive director of international gas at PIRA Energy, a New York-based energy consultant. The discussion of a cartel, he says, is "in large part a reflection of that."

India and China, both growing importers of tankers full of liquefied natural gas, have used their huge demand potential as leverage in negotiating long-term pricing. There is concern among gas suppliers that other Asian buyers, in particular Japanese and Korean utilities, may seek similar pricing when numerous long-term contracts begin to expire in coming years.

While oil is traded in a global marketplace, gas is bought and sold in fragmented markets. The U.S., for instance, gets most of its gas from domestic sources as well as Canada and Trinidad. Europe gets most of its gas from the North Sea, Russia and exporters from North Africa and the Middle East.

Russia's interest in pooling its gas supply would be unusual, given that it never joined OPEC, despite being the world's second-largest oil exporter, perhaps because it didn't want to submit to quotas set by other countries. It has resisted past calls to curtail output to support prices.

Still, Mr. Putin has been working to strengthen Moscow's ties with other major gas producers. After he visited Algeria last year, Gazprom last month reached a series of cooperation agreements with Algeria's Sonatrach, Europe's No. 3 supplier. European Union Energy Commissioner Andris Piebalgs called for an explanation from Algeria and Russia, since they could use their 35% share of the European market to potentially fix prices.

Next week, Mr. Putin travels to the Persian Gulf on a trip that will include the first-ever visit by a Russian leader to Qatar, which controls the world's third-largest gas reserves.

Iran state television quoted Mr. Khamenei as saying on Monday: "Iran and Russia can establish the structure for an organization of gas cooperation like OPEC, as half of the world's gas reserves are in Russia and Iran."

Earlier this week, Qatari Oil Minister Hamad al-Attiya said on television that he thought it would be difficult to form a gas producers' organization, but didn't rule it out. He pointed out that most gas-supply contracts are typically long term because of LNG'S up-front production costs, extending more than 20 years. That would undercut any concerted effort to make short-term adjustments to production or otherwise influence prices.

Thanks for the reference Frenchee- picked up a starter position at $16- I think the chart is overbought, but looks like a good lt play

BRNC Chart

Bronco Drilling is a rare find: a small-cap growth stock with a beaten-down value profile.

Normally it’s very tough (if not impossible) to find small-cap companies with excellent growth prospects, strong cash flow, and minimal long-term debt trading a mere twenty to thirty percent above book value. (Bronco is trading just under $16 as of this writing, with a $396 million market cap.
Book value is $12.95 per share according to the Wall Street Journal.)

Most of the time, companies trading close to book have an outlook ranging from “blah” to “ugly.” If a business sells for a just few dollars more than what the parts are worth, the natural assumption is that something is very wrong with that business.

If that same business is well run, making solid profits, has the means to retire its long-term debt in a short period of time, and could theoretically generate enough cash to buy back all its own stock in the next few years… now you’ve got a real head scratcher on your hands.

Except in Bronco Drilling’s case, the mystery has already been cracked. We know the problem is the manically gloomy sentiment surrounding natural gas.

Bronco is a small-cap land driller, headquartered in Oklahoma City, Oklahoma. They provide contract drilling services—land rigs—to oil and natural gas exploration and production companies, with ongoing contracts in Oklahoma, Texas, Kansas, Colorado, and North Dakota.

Approximately half of Bronco’s customer base are publicly traded companies—well known entities like Devon Energy and Chesapeake Energy. The other half are strong independents. Bronco’s customers have at least two things in common: they are committed to the long-term bullish case for natural gas, and they are committed to drilling.

Between December 15th 2006 and January 11th 2007, Bronco Drilling shares were pummeled, registering a 30% decline in less than two months. The selloff came during a period of general carnage for the drillers, as oil declined and natural gas fears escalated with the persistence of mild winter weather.

Things were orderly at first, and then Nabors Industries—a large competitor of Bronco’s, and one of the biggest land drillers in existence—announced a fourth quarter earnings warning on January 3rd.
Nabors went into freefall at that point, and Bronco followed.

At the worst point of the decline, the spread between Bronco’s share price and book value shrank to about sixty-seven cents… less than the company’s third quarter diluted earnings of 70 cents per share.

When the implied value of the entire business operation is compressed to less than one quarter’s worth of earnings, you know there is some panic in the house.

Legendary value investor Ben Graham liked to talk about “Mr. Market,”
analogizing the stock market to a human being subject to fits of optimism and depression. Thanks to the dominance of fast money and short-term time horizons, Mr. Market is a bit of a drug addict these days, downing copious quantities of quaaludes and methamphetamines. When Mr. Market gets exceptionally out of whack, opportunities arise like this one.

The real worry for companies like Bronco and Nabors is what’s happening in the land rig market. Nabors’ cut of fourth-quarter earnings guidance, which it blamed on slowing North American gas markets, led to dire scenarios of collapsing day rates and rigs sitting idle as result of a glut.

In Outstanding Investments’ opinion, these fears are overblown. There is fair reason to have concern, but nothing to justify the crush of pessimism that has weighed down the drillers so heavily. That is, if one understands the basic realities of peak oil and the compelling long-term case for natural gas.

In regard to rigs and day rates, Bronco Drilling also stands out for the quality of its management and farsightedness of its strategy. Bronco keeps close tabs on market conditions, and is careful not to “compete with itself” by putting out more rigs than the going market can support.

When the market is less conducive to putting out refurbished rigs, Bronco scales back and uses its cash flow to diversify into other complimentary businesses, like workover rigs—the mobile machines that handle cleaning, service and maintenance for wells already in production. Bronco’s recent acquisition of Eagle Well Service is an example of expansion in this direction. Bronco is also mulling over the possibility of international expansion as conditions and opportunities warrant.

Bronco Drilling reports good visibility with its clients; CEO Frank Harrison reported on the third quarter earnings call that there seem to be no issues with drill budgets, and “if anything we’ve seen a push to continue to drill.” Because of their high-tier focus on support, service and safety, Bronco Drilling also enjoys stronger relationships with clients than many of its smaller independent competitors. This adds a layer of stability to revenues, as the less established fringe players are the ones to see their rigs idle first in adverse market conditions.

The land rig market is not without risk in the coming months, but the potential reward seems well worth it. While Bronco Drilling has already bounced off its oversold extremes, it is still trading under its $17 initial public offering price as of this writing—and this comes with excellent management and excellent results.

Book value acts as a floor underneath the stock—if worst comes to worst, a vulture investor could break up the pieces of Bronco and sell them off for
$13 a share or so, if not more under the right circumstances. But that isn’t likely to happen by any stretch of the imagination. What is far more likely, in our opinion, is that day rates and rig utilization will stabilize and resume their upward trend in due time, and Bronco will continue to grow and thrive.

Of course, if Mr. Bastardi of Accuweather is right in his weather predictions, sentiment for the land drillers could turn extremely quickly.
At a current price to earnings ratio of less than eight, Bronco could theoretically see 50% or more upside simply by way of removing the cloud of pessimism overhead.

Even if the weather remains mild and the sentiment adjustment a ways off, the natural gas case is solid—and Bronco Drilling looks worth holding on to for “multi-bagger” upside potential in the years to come.

Rock bottom. traded down on gas prices. shouldn't have ever gone this low. 5X pe

buy it now for a 50% easy return

Hey I agree with you on this one. bought today at 17.00. This one is cheap in a very cheap sector. you can play all the spec oil service guys, but this driller is for real. If natural gas goes up this stock will certainly give you that 50% fast. Even ir nat gas stays at these levels the earnings will play out. No downside here. I've know this one since the ipo. Its real and the oil and gas brokerage boutiques all follow it and love it.

BRNC is my favorite play in the oil and gas services sector. Analysts are expecting them to make $0.67 in Q3, $0.76 in Q4, and $3.71 in 2007. They are the cheapest of several that I have investigated including TDW, GW, PDC, RDC and possibly even ALY. The nice thing about them is that they are adding new rigs that they are refurbishing which will grow revenue. They have been doing this for quite some time so it will be easy for them to execute. I think that BRNC should be 20-30% higher to be on par with it's peers in the sector. Also, I think the sector is extremely undervalued. I expect this stock to be at least 50% higher sometime within the next year.

Mike

Bronco Drilling Company, Inc. Announces Third Quarter 2005 Results

OKLAHOMA CITY, Nov. 7 /PRNewswire-FirstCall/ -- Bronco Drilling Company, Inc., (Nasdaq/NM: BRNC), announced today financial results for the three and nine months ended September 30, 2005.
Revenues for the third quarter were a record $18.6 million compared to $11.7 million for the previous quarter and $5.4 million for the third quarter of 2004. Average operating rigs for the third quarter of 2005 grew to 15 from 12 for the previous quarter. The growth in rigs is due to the refurbishment and deployment of two of the Company's inventoried rigs during the third
quarter of 2005 as well as the acquisition of two operating rigs. Revenue days for the quarter increased to 1,284 from 1,027 for the previous quarter and from 786 for the third quarter of the previous year. Average daily cash margins(1) for the quarter ended September 30, 2005 were $5,945 compared to $4,648 for the previous quarter and $1,266 for the third quarter of the previous year...."

Bronco drilling page created by Pennymaker. Who said Brnc drilling was a smart ipo to get into back in August and is making a bundle.