Friday, July 25, 2008

Earnings and upgrades to close the week

Most of the oil drillers are staging a comeback this morning, after the swift selloff of recent weeks. This is perhaps due (at least in part) to some upgrades from Jefferies & Co. In my portfolio, Ensco (calls 3.5% of portfolio) and Noble (calls 5.9% of portfolio) were both upgraded from Hold to Buy. These upgrades are overdue, as forward P/E ratios are getting very low.

In addition to upgrades, we also got earnings from Bookham (6.8% of portfolio) last night. Although they are making good progress toward profitability, the valuation probably already reflects that progress for the next quarter or two. I'll decide soon whether to trim a bit, as it is becoming too large a percentage of my portfolio.