HDY put in a breathtaking performance an hour before the close on Friday. HDY traded about 75,000 shares in the last 10 minutes of Friday’s trading day, and closed at the lofty price of $3- a level not seen since May of ’05.
HDY has been keeping shareholders abreast of developments in Guinea. According to yesterday’s press release, CEO Kent Watts is in the Republic of Guinea right now meeting with government officials. If he comes away with the long sought after drilling permits, look for the stock to capitulate to the upside in a crescendo move.
company,
By now you should have read the weekend edition on big, steaky moves. With HDY, you are looking at a big streaky move as it is happening.
Is it a sell? In my view, not yet. However, this is shaping up as a “buy the rumor, sell the news” type situation. Here’s the pattern- news before the open, stock gaps up, sellers surface, stocks trades below previous day’s close, sellers really step in and drive it lower. The company has been telegraphing to investors that it is closing in on getting the offshore drilling permits from the Guinea gov’t. If they can pull it off in the next few days, I would expect this stock to streak higher and provide a great selling opportunity for traders. If they are delayed for some days, it will probably drift back down.
The streak will be over when the stock trades lower than yesterday’s closing price after gapping at the open. I am not selling any of my 20,000 shares, and I would advise to hold on as well for the time being. Stand by for future updates- a profit taking opportunity could be coming soon.
My comments are geared mainly to traders- if you are a long term investor lookng for $10 or more, and don’t want to trade, just stay on the sidelines.
Your comments and questions are welcome.
Would HDY be a good initial buy now?
Editor: I can’t say for sure, but I would advise against it. Wait for a pullback to a reasonable level. If you do decide to buy, don’t invest the whole amount. Buy 1/3, and save the rest of the capital in case it pullbacks.
You have been taking an ass kicking this year by several on this site and now YOU WERE RIGHT ON THIS ONE. Good for you and all of those who stuck it out. I paniced and sold mine when it began to drop-dumbass on my part. Thanks for the advise.
Editor: If you tracked what I did, you will note I sold it all when they lost the Guinea concession, but bought it back when the righted the ship. After a very tough 2005, I have been lucky on about 4 in a row now- BYTH, KAL, TLPE, and now HDY have all been big wins. It’s as if someone flipped the microcap switch when we made the turn to ’06.
Can you give me your best estimate of what kind of POS spike we can expect on news of granted drilling permits.. Just an estimate of what you think is possible. BB
Editor: $1 to $2- but I believe it will be a spike to sell into. Maybe not all, but partial sale at least.
If you sell into a spike, will you be looking to buy those shares back later? Are any of your HDY holdings “tucked under the pillow” for long, long term gains (3+ years)?
Editor: I don’t know for sure. I’ll probably sell it all on the spike, but it depends on how it is trading. However, that will not end my involvement. If I sell it is with the intent to buy it back at a lower price. There will be many more tradeable events from this company for years to come if they can get started in a drilling program.
HDY has had a good run lately. Do you have a price for at least a partial sell.
Editor: Not a price- an event. Wherever the event spikes the stock is where I will be selling either some or all. The event the market is anticipating is the award of the drilling permits for the first test wells by the Guinea gov’t.
1/30/06 – HDY The stock seems to have really come alive of late. I bought in on 1/24 at $2.77 and today, one week later, it closed at $3.41, not bad, and this jump does not even include an new reports or announcements regardign the Guinea gov’t's approval for the drilling/exploratory work. Being optimistic, when that happens, it should really be very interesting. Thanks, Walt
Editor: As I have been saying, this stock has a history of spikes on corporate events. The market is pricing in the award of the drilling permits now. If and when it is actually announced, I will be a seller on the spike I anticipate. However, there will be many more spikes and pullbacks on corporate events for years to come.
What no comment today, I think you have bragging rights here.
Editor: Ever now and then an accident happens and I get one right. How about DXCM from the weekend edition- new all time high there.
thx for your advise as i really like this deal…………
Editor: What’s not to like right now? There will be problems, but the stock is sure fun at this moment.
My concern about selling into the next spike (the one anticipated after HDY announces a new PSA and the possession of drilling permits) in an attempt to buy back at a lower price is the timing of the next probable spike–the announcement of a drilling partner(s). Do you have any feel/thoughts on how long it will take to work out those agreements? I would hate to be on the sidelines when that annoucement reared its lovely face. If it’s a matter of weeks or months, the stock may retrack nicely. On the other hand, the Wall Street Journal or some such could discover this cinderella story in the meantime and we may be off to the races. What say you?
Editor: I can only guess. However, common sense would dictate that it will not happen in a one two punch. If you were asked to put up the money to drill in a third world location, wouldn’t you take the time to do some due diligence on the agreements? And, if someone came to your door asking you to invest, wouldn’t you tell them to let you know when their deal was done. My common sense tells me there will be some lag time. If they raise the money themselves, that will also take some time.
As to comment #9 re drilling partner: I think it is very possible the drilling partner may already be lined up! If so they could very well announce both events. After all bp & hdy already have a working deal in gas fields of LA. vince
Editor: I would agree there have been preliminary talks, and there are probably some indications of interest. However, no one could act until they have time to do due diligence on an agreement. A large company is not going to take the time to negotiate final terms on anything until the deal is signed, and they can review it. Realisitically, it’s going to take a while. It’s just common sense.
Per my comment and comment #9. If HDY announces a new PSA, the possession of drilling permits AND a partnership with someone in one press release, the problem is solved. However, for the reasons mentioned, it is unlikely. But considering just how long it has taken to re-establish a relationship with the gov’t of Guinea, it would be common sensical to be working on a partnership–if only a letter of intent should HDY get the PSA etc.– with interested parties in an effort to shorten the process when and if the PSA is re-established. All DD etc. has been done and all that remains is the signing and the handshake. That’s what I would be doing if I was running the show. What say you?
Editor: All the DD cannot be done until HYD is holding a signed document from the appropriate ministers. Then the follow up has to occur. If you were a large oil company, would you do a lot of dd without a signed doc? I wouldn’t. It’s fun to speculate on how this will unfold. Thanks for your contribution.
You are probably right on the time line. These things never seem to move along as quickly as we would like. Looks like a good trading opportunity looms right around the corner. Thanks.
Editor: If the stock finds its way to $4 or better without the news, I might not be able to resist selling half. With the news, wherever it goes.
i’m kind of thinking that today’s announcment was a bad one. wouldn’t people want the next press release to be something regarding drilling permits rather than the relatively questionable “democratic process”. wouldn’t this indicate that some people over there aren’t quite certian that HDY is the direction they want to go with? what are your thoughts?
Editor: Check the next entry.
Not very happy with the stock’s reaction to today’s PR. Do you anticipate a quick follow-up PR with more details? No PR is sometimes better than fluff. What do you think? Buce
Editor: I think you are absolutely right. If they were going to do anything, it shouldn’t have been apologetic. Bad move.
This has nothing to do with HDY but I see nothwer vehicle to ask random questions. Please— can you give me a website and the name + phone # for an OTC stock: Many thanks. Bruce (HDY shareholder)
Editor: Typically you can find that information on any press release that has been put out by the company.