$NOV

Byadmin

Mar 30, 2015
summary of my perspective: not yet, but solid idea

a few things, mostly regarding timing and right now i think the timing is bad although i think that in 5 years the stock will be higher, this was one of the companies that i followed back in 2008.

right now, oil supply exceeds oil demand, and i think that there is good reason to believe that oil will set new 10 year lows, note that this is less than $40/barrel and back in 2008 when oil cratered NOV was around $20 at the bottom
so, i expect oil to drop significantly, i also expect that poor earnings will flow through in the next couple quarters due to lower oil prices and lower demand …
and then there are price liquidations, aka the people that will sell due to lower price, and then later this year tax loss selling, etc.
i think that there will be a better buying opportunity here, but i also think that once these low oil prices blow over (12-24 months, as early as the back half of this year), that oil will climb back up to a point that will fill the backlog of national oilwell varco, and then it will (based on what happened in 2008-2009), take around 2 years for the stock to climb back up to the $80’s.
so right now, i think that it’s top heavy but once things fall apart this wouldn’t be a bad place to take a 10% position or so, it’s not risky from a debt perspective considering that they don’t have any.

By admin