hdrjr, hello
Varco is largely a tool manufacturer, and their dominant market consists of rig contractors (for things like top drives) and service companies (for things like casing equipment, etc.).
Although they may be in solid fiscal position, there is little hope for any dramatic increases in sales in the near term, hence lackluster stock performance is expected. In this interim period, when activity begins to pick up and equipment once again becomes active, service companies are likely to "make do" with existing equipment, rather than invest in upgrades.
I would recommend you watch the shipyards closely, and when you begin to hear about refittings and re-commissionings of stacked rigs (which, in the case of MODU's often require the services of shipyards), consider an investment in Varco then.
My own opinion - not shared by all, but based upon my experience in SE Asia during the last activity spurt, is that the shipyards will begin to pick up as rig activity begins to ramp up, say by next February. JMHO.
Regards and Good Luck to All,
Aggie |
