The fundamentals are compelling, the company trades at 14 times projected earnings, and estimates suggest the company will grow at 28% annually for the next 5 years. Quarterly revenue growth is 43% year over year and the resulting quarterly earnings growth is 129% from the previous year. Net income reported in the past 4 quarters has grown from $147.9 million to $275.9 million, an increase of 86%.
Consider the following:
Global demand for oil services and equipment significantly exceeds capacity.
Long term debt is less than 5% of the net worth of the company.
This company has consistently beaten analyst’s earnings expectations.
It has a strong contract backlog extending into the next decade.
This company has a history of smart acquisitions, which has significantly expanded its capabilities and global footprint. If you believe as I do, that more drilling activity whether its oil or gas, land based or offshore, is both necessary and inevitable, then NOV is almost certain to be a strong beneficiary.
Disclosure: Author has a long position in National Oilwell Varco