LSS & NSS

**superbowl** Tue Apr 11, 2006 3:08 pm

LSS & NSS
Hi Blast, given the future high price of oil and gas, I am thinking about the Oil & Gas Services Industry. Please check LSS and NSS, both companies have good fundamentals and outlook, and the valuation seems to be cheap too. I appreciate your valuable advices. Thanks!

**blast_investor** Wed Apr 12, 2006 10:57 am

Hi superbowl,

LSS and NSS are metal tubing and piping manufacturer for oil industry. Their valuation appear pretty reasonable and oil industry is booming right now.

One thing I would caution you is that metal tubing and piping like lSS NSS companies are very cyclical company. Typically, a cyclical stock would trade around PE of 8 to 10. Their business cycle is not necessarily same as oil E&P industry. The trick to succeed with cyclical stocks is to invest right before or during up cycle and sell at peak earning time.

I have not studied this industry enough to know the cyclical risk of NSS and LSS. Each sector would have different cycles. But from insider buying and selling activities of both stocks, I can see that management of both companies are not so enthusiastic about their stocks. They all had pretty large insider selling recently with no insider buying.

I would not touch both cyclical stocks given their unfavorable insider activities. Cyclical stocks usually are pretty risky stocks that trapped many inexperienced investors a lot in the past.