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It should be an interesting day in the markets on Monday as a deeply disappointing jobs report, rising yields on Spanish debt again and Egan Jones' downgrade of U.S. Government Debt hit investors' confidence. It is times like this I am happy I have a solid amount of dry powder available to deploy and my short positions should keep my portfolio less volatile than the overall market. One equity I am looking forward to pick up in any significant pullback is Oil States International (OIS).

Oil States International -

Oil States International, Inc., through its subsidiaries, provides specialty products and services to the oil and gas drilling and production companies worldwide. It operates in four segments: Accommodations, Offshore Products, Well Site Services, and Tubular Services.

(Business description from Yahoo Finance)

6 reasons OIL is a solidly undervalued at under $79 a share:

  • Consensus earnings estimates for FY2012 and FY2013 have increased over the past month and have had an even greater improvement over the last 90 days.
  • The market is deeply discounting the company's earnings growth as it has a five year projected PEG of just .28.
  • The median analysts' price target is $104 on a composite of 11 analysts' targets. Credit Suisse has an "Outperform" rating and a $105 price target on Oil States.
  • The stock is priced at under 10 times forward earnings and its trailing P/E shows it to be trading at a 30% discount to its historical average.
  • It has a significant and growing "accommodations" division, which helps diversify its revenue base.
  • This sales diversification offers some stability in light of low natural gas prices which have hit other oil services firms harder. This is a core reason this stock has outperformed competitors like Halliburton (HAL) significantly over the past six months (See Chart).

(click to enlarge)

Source: Looking To Pick Up Oil States International On Any Significant Pullback

Additional disclosure: May initiate position in OIS in next 72 hours.