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Crude oil peaked at 100 in January, dipped into a trading range of 86 to 94 for about a month, and has just broken out to the upside reaching 98 yesterday morning. This has allowed a number of oil drilling/exploration and oil equipment/services companies to rally and they did quite well yesterday.

National Oilwell Varco (NOV) is a nice company to own in the Oil & Gas Equipment and Services industry. They do not offer a dividend but the growth is solid with 25% revenue growth in the current quarter and rising expectations for the earnings this year. With a price to earnings ratio at 18 and Year over Year growth of 57.5%, I would consider the stock cheap. The stock is up 83% this year but has more room to go if oil continues to perform well in the near term.

Transocean (RIG) is my pick in the Oil & Gas Drilling and Exploration industry. Again, this company does not offer a dividend but their sales growth is off the charts at 93% in the current quarter and 122% in the next. Analysts have continued to increase their expectations for earnings growth in the current quarter, the next quarter, and for the year. With a P/E of 14 and earnings growth of 215%, this stock is very cheap at these levels. For the past 52 weeks, the stock has risen 69% but is off its high for the period of 149, currently trading at 131.

Disclosure: none

Source: National Oilwell Varco, Transocean to Benefit as Oil Heads Higher