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The current position of the Oil and Gas Equipment and Service Industry Groups is really not that low on my lists. Nonetheless, I expect it to take it on the chin during the time frame of my anticipated pullback. Clearly then, this "Industry Group" does not at this time qualify as "Currently Favorable" and the shares of its component companies should likely be avoided or perhaps shorted.

In the table below, you will see 5 companies within this Industry Group that can be shorted in the near-term.

Valuation / Comparative Analytics Table: Oil and Gas - Equipment and Service

Company

Price

Target Price

PEG

P/E

Forward P/E

Target Price Percent

Comments

Exterran Holdings (NYSE:EXH)

25.1

- 20% - 30%

-1.31

20.

100.3

- 484

Possible Near-Term Candidate for Short Sale

Lufkin Industries (NASDAQ:LUFK)

46.4

+ 47% - 55%

2.12

55.5

15.1

+ 368%

(no downside projection at this time)

National Oilwell Varco (NYSE:NOV)

48.5

- 15+ %

1.71

12.7

14.6

- 123%

Possible Near-Term Candidate for Short Sale

Schlumberger (NYSE:SLB)

67.2

+ 20% - 26%

1.43

26.5

18.1

+ 146%

(no downside projection at this time)

TETRA Technologies (NYSE:TTI)

9.9

- 10% - 22%

0.99

11/2

11.9

- 106%

Possible Near-Term Candidate for Short Sale

Notes: Fundamental Valuation, in today’s marketplace, requires “Tweaking” the Results." This is with an eye on the short-term action of the company’s Price Movement. This analysis also considers the, two-year - Forward P/E. Using this procedure produces very accurate Analytics for decisions at Bussish and Bearish Inflection Points.

Most Financial Analysts determine the Price Target Range by estimating future earnings per share and then apply a price-to-earnings "multiple," also known as the P/E ratio. I prefer to calculate Price Targets (high / low) for both the current and next fiscal year by applying the stock's present multiple to the average professional analyst's estimate and then do some serious tweaking.

My Wrap

So while I believe the general market may be in for a pullback, the prevailing question from most investors is: How big will it be? Do I hold my current positions or do I sell? Is there a profitable alternative? The answer will be obviously quite clear when it (the pullback) is over but an old axiom tells us to be prudent in times like this. You might want to remember that cash is always an excellent safe harbor. However, if you are a proactive investor, taking bearish positions may be also being wise.

Disclosure: No positions

Source: 3 Timely Shorts in the Oil & Gas Equipment and Service Sector