Re: PSN - Maintaining Margins - Nawar
Nawar, I've visited Yahoo and your posts there are undisguised pumping. In fact they call you Nawar the Pumper, or just accuse of pumping. Your name is the only one that I've seen attached to the word pump and its derivatives. Now you come on here and are the "voice of reason" or at least that's what you try and project. Will the real Nawar stand up please!
When you wrote a piece that was persuasive on Gasfrac I got interested in it as an investment. We exchanged one on one messages. However when we got to some of the tougher questions you did not answer them directly, but gave the answer of a politician. You refused to answer some other questions and in one case gave me the wrong answer. You claimed that Gasfrac received $200,000/stage. That I now know is incorrect. so either you don't know the correct answer on a very important question about the company you are supposed to be an expert on or you gave a misleading answer. I personally don't think you knew the answer and were too embarrassed. Knowing that is the only way you can test management's representation and in fact do your own analysis instead of just repeating what you are told.
What does GFS have to do with PSN? Plenty. I think you you got into a pi**ing contest with someone over GFS and decided to go after their favorite stock. Plain and simple.
You have only raised questions about PSN, not offered any concrete analysis. These same questions have been asked by Sam, myself and others and they have been answered after a lengthy painstaking process.
Your analysis has two main points, that PSN sells for more than its accumulated capex and that competition will come in and reduce margins. Both stem from your misunderstanding of what PSN is. It is not a seller of tanks, using rental rather than outright sales. It is a service company. It is common for service companies to have multiples 4x and 5x bv. That means that their multiples of capex would be as much as 5x to 10x accumulated capex. PSN does not rely on its patents to prevent competition from eating at its customer base. it relies on service, a zero defects service delivery both in terms of product and service. It relies on long term contracts with a critical mass of customers that reduces potential competition by sharply reducing the available customer base. It relies on successful deployments with non contract customers who now know their reputation and have direct experience that mutually reinforces that reputation.
The idea that one or two failures could hurt their business is far fetched. Its true GFS has had two serious incidents, but no one is maintaining it hurts them even though people were admitted to the hospital with serious injuries.
As Sam said, and this is my paraphrase, its time to put up or shut up.