Helix Energy Solutions: Offshore Oil Services Company Looks Promising

| About: Helix Energy (HLX)
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Oil is in short supply relative to the strong demand it faces from China, India and other developing nations. No major new oil discovery has been made on land in the last few decades and with oil prices making themselves at home at these levels, it seems like oil companies need to find oil somewhere. So if we are out of oil enriched land, a natural alternative is to look for oil under the ocean bed. Granted that this is not a new concept, but it has never been more prevalent than it is now.

A company that specializes in providing oil field services on and offshore is Helix Energy Solutions (NYSE:HLX). It offers diving services, deepwater construction, robotics, well engineering and operations, platform ownership, and oil and gas production. Formerly known as Cal Dive International, Helix has been outperforming its peers of late. With triple digit quarterly earnings growth, the stock has been under some pressure lately with oil prices touching 70 last week before rebounding.

HLX trades at 8 times 2007 earnings and sports a value PEG ratio of 0.28 - an undervalued company in my opinion. It has the highest earnings growth and operating margins among its other mid-cap rivals, and yet, is the cheapest of them. The stock could easily see 45 by year end and I recommend patient investors to start buying now.

HLX 1-yr chart: