2008
Stock Market 2008: Energy
Posted by Jim in Sector OutlookIt’s round two of our look toward the 2008 stock market. One of the more obvious plays is in energy, where the rising cost of oil is highlighted almost daily. But don’t assume that the rising price of the commodity will boost oil companies! Never confuse the two, although they might interact on paper. We’ve got some winners… let’s get started.
Oil Equipment, Services & Distribution – The Net Fool picks THREE!
On December 14, 2007, Jim Cramer said that “drillers and oil producers are in a quick, shallow decline, and they’ll soon be flush with cash.” This sentiment holds true in three companies, which each offer unique areas of growth in 2008.
The Net Fool picks Transocean (NYSE: RIG)
The play with Transocean centers on their drilling capabilities. Their oil rigs can reach depths no other drills can. Add this to their locked in 2008
contracts, and you have quite a find! RIG is the leading provider of contract drilling services for the oil and gas industry. Acquiring rival Global-SantaFe (GSF) last year sets RIG up with some major growth benefits. But it is their solid fundamentals and a tried-and-true business strategy that makes this trade.
The Net Fool picks Halliburton (NYSE: HAL)
Halliburton has seen solid growth in the third quarter from the Middle East,
Europe and Africa. Margin growth is expected to continue next year, and they trade at a discount to their peers with a P/E around 14.1 versus the industry’s 18.8. HAL carries slightly more risk than RIG and SLB because of an added political exposure, but Bush’s time in office will prove golden for Halliburton. An outperforming company in an outperforming sector, HAL gets my bid. Read the rest of this entry »
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