Navellier: Oil Service Trio

07/08/2005 12:00 am EST

Focus:

Louis Navellier

Editor, Blue Chip Growth and Emerging Growth

"Stocks in the oil services business are really hot now, as the rush is on to add new oil and gas reserves," says Louis Navellier, long one of the industry's top performing advisors. In fact, three of his latest "stocks to buy" are involved in this sector. Here's a look at this oil service trio.

"Helmerich & Payne (HP NYSE) is a contract driller that operates more than 130 land and offshore platform rigs, mostly for industry giants such as BP, Shell, and ExxonMobil. Its contract drilling operations are conducted mainly in Louisiana, Oklahoma, Texas and Wyoming, as well as offshore California, in the Gulf of Mexico, and in South America. HP operates 50 FlexRigs, which are drilling rigs that are equipped with new technologies, environmental and safety design, and the capability of simultaneous crew activity. The company benefiting from surging day-rates for drilling rigs. Thanks to higher day rates, the company’s operating margins are expanding, and the stock should announce extremely strong earnings results. 

"Superior Energy Services (SPN NYSE) provides specialized oil field services to oil and gas companies operating in the Gulf of Mexico and on the Gulf Coast. The company sells and rents oil and gas well-drilling equipment from 27 Gulf Coast locations, and offers a limited range of tools and services in Canada, the Middle East, Trinidad and Tobago, the United Kingdom, Venezuela, and West Africa. Superior Energy furnishes wire line well access services to acquire data and perform remedial activities. The company also manufactures, rents, and sells specialized drilling and spill containment equipment. SPN is a conservative stock that’s benefiting from surging rates in the oil service business.

"Tenaris (TS NYSE) makes seamless steel pipe products and its Argentine subsidiary, Siderca, makes casings, tubing, and line pipes used in the oil and gas industry. Its subsidiary Tubos de Acero de Mexico also manufactures mechanical and structural seamless pipes. The company also produces welded steel pipes for gas pipelines in South America through Siat and Confab subsidiaries. Tenaris is a big beneficiary of high steel prices and booming business in the oil and gas industries. I rate Tenaris a moderately aggressive buy."

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