Doug, I found very positive news concerning the Oil Service Sector from Briefing.com. Looks like a good day for us tomorrow.
") OILFIELD EQUIP & Services.........2..........10/23.............(+)
Comment: Briefing is impressed with the recent performance of the oil services stocks, especially given that group's earnings results haven't been very good. When stocks rally on bad news it typically marks the beginning of a sustainable upmove. Note group begin sharp descent prior to earnings slump. In fact, year-to-date, the industry is one of the worst performers in the S&P universe, down nearly 30%. However, the forces which pressured the group lower - declining oil prices, excess supply, Asian/Russian financial crisis, OPEC production increase - have, or are, abating. US reserves have declined steadily in recent months; OPEC scaled back production; Asian markets rebounding amid expectation that worst is behind the region; crude has held above the $13 bbl for several weeks (not great but better). In addition, current forecasts call for a colder than normal winter, the reverse of last year. Combine the improved fundamentals with the group's discounted valuations and the ingredients are in place for continued gains. That said, the risks remain greater than normal as worldwide economic picture is clouded. Too early to tell whether recent attempts at reversing slowdown (global move to lower rates, IMF funding, Japanese bank reform) will have desired effect. Nevertheless, we contend that the risk/reward ratio favors the upside and as such up our rating from 4/2 to 2.
Stocks: Baker Hughes (BHI), R&B Falcon (FLC), Global Marine (GLM), Halliburton (HAL), McDermott International (MDR), Schlumberger (SLB), Smith International (SII), Tidewater (TDW), Transocean Offshore (RIG) and Unifab (UFAB).
What do you think?
Santiago
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