Buy These Drillers on the Dip
It was a bad day for energy stocks Wednesday as oil fell some $4 a barrel and equities in the sector sold off in sympathy. The oil-services sector is now back to where it was a month ago after a large run up in the first two weeks of September. I believe this provides a good entry point for long-term investors as long as oil prices do not collapse, which I view as unlikely. In addition, natural gas prices are up some 50% from their bottom earlier in the year.
Finally, the sector has recently received more positive comments from analysts. Goldman Sachs came out the other day with an upgrade on National Oilwell Varco (NOV), saying it will be one of the beneficiaries of the strong current newbuild demand. Credit Suisse also chimed in this week, stating that midwater rigs are in a sweet spot right now with tight supply meeting increasing demand, which should be positive for day rates throughout 2014....282 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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