From the Fool:
Grey Wolf, a Houston-based drilling company, is another low-priced stock for which our CAPS players have high expectations. With a fleet of 118 premium rigs and operations in some of the most potent natural gas markets -- including the Gulf Coast and South Texas -- it's not too hard to see why.
In the most recent quarter, Grey Wolf's net income surged 38% while revenue rose 18%. The company also produced $288 million in operating cash flow and ended the year with $230 million in cash on the balance sheet. As improvements in the level of drilling continue to increase, Grey Wolf should only benefit from the long-term trend of rising day rates. Even Little Red Riding Hood would have no trouble picking this one out.
Currently, the company trades at a P/E of 7 and a PEG of 0.75, indicating the wolf is reasonably priced and has plenty of room left to hunt. For example, these two CAPS All-Stars drill right to the heart of Grey's matter:
* slbutton: "Let's look at some numbers: ROE of 48%; shares are trading at a little over twice book value with diluted EPS of nearly $1. On the fuzzy, non-quantitative end of things, I like the fact they're using refurbished rigs -- I like management to have a fiercely cheapskate mentality."
* stephenjpauls: "Long term I think GW will continue to grow and should see big gains by Q4 2007. Some have speculated that GW is ripe to be purchased by a larger company. The company continues to maintain, improve and add bigger/better rigs to keep competitive."