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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (10820)	1/28/2012 9:35:45 AM
From: Ditchdigger	1 Recommendation Respond to of 34328

Morning Sergio, re: NATDF & SDRL (grabbed from another thread, but from Barron's) International Trader - Europe \| SATURDAY, JANUARY 28, 2012 Oil Lights the Way North By DIGBY LARNER \| MORE ARTICLES BY AUTHOR A London fund manager sees more than 20% upside in four Norwegian oil-sector plays: Aker Solutions, Seadrill, North Atlantic Drilling and Det Norske. There've been few European-equity havens from the debt-crisis fallout. Norway is a robust exception. It's outside the euro zone and is oil-rich. And its debt-default insurance is the world's cheapest. "That the world's strongest sovereign credit is in Europe is probably a surprise to most," says Barry Norris, a fund manager at London-based European equity specialists Argonaut Capital. Norway's oil industry has protected it throughout the financial crisis. Oil generates around 20% of gross domestic product—and is entirely responsible for its budget surplus, currently running at about 11% of GDP. Norris highlights these Norwegian energy-sector companies: Aker Solutions (ticker: AKSO.Norway) in oil-services; SeaDrill (SDRL) and its spin-off, North Atlantic Drilling (NATDF); and explorer/producer Det Norske (DETNOR.Norway). Aker Solutions is set for a rebound, after overcoming problems in its Brazilian business. "It had a number of negative one-offs last year, with cost overruns in Brazil. Its earnings should bounce back this year. It has single-digit [price/earnings ratio], and may sell some of its less-good parts, [the proceeds of which] could go back to shareholders," Norris says. Last month, the company reaffirmed its 9% to 15% annual revenue-growth target for 2011-15, and an Ebitda (earnings before interest, taxes, depreciation and amortization) margin improvement of three to four percentage points over the same period. "We have a potential to increase our market share, and the financial muscle to grow further through acquisitions or partnerships," said Chairman Oyvind Eriksen at the time. Aker's shares currently trade at around 73 Norwegian kroner (a krone fetches 17 U.S. cents), still well below a 52-week high of NOK113.44. The consensus target, according to FactSet, is NOK87.95. Norris calls SeaDrill the world's most valuable oil-rig firm. Its fleet is very new, and is predominantly exposed to deep water and harsh environments. The dividend yield is 8%. The main holder is billionaire John Fredriksen, arguably Europe's most impressive entrepreneur, with a background working in tankers, salmon farming, liquefied-natural-gas tankers and oil rigs, Norris says. At $36, the stock's off a 52-week high of $38.49. (Main listing: SDRL.Norway). More interesting still to Norris: North Atlantic Drilling, with pure-play exposure to rigs, where day rates should keep rising; a dividend yield of 12% (in kroner); and potential further upside from industry consolidation. A coming U.S. listing should be another catalyst. He sees at least 50% upside over the coming year. North Atlantic Drilling mainly owns Norwegian oil-rig assets, which should benefit hugely from recent major discoveries. Its shares are little changed since they first traded in February last year at NOK10.29, currently NOK9.60. Analysts share Norris's expectation that the stock will snap out of its current becalmed state. FactSet puts the consensus target at NOK12.11, close to 29% higher. Expectations that oil prices will stay above $100 a barrel are clearly positive for Norway's energy sector. That's even as Norway makes new discoveries; the most prominent, Avaldsnes Aldous, is estimated at 1.7 billion to 3.3 billion barrels of high-quality oil—in shallow water. The field's main operator is giant Statoil (STL.Norway), but Norris prefers exploration-and-production company Det Norske, which owns 20% of the Aldous field: "We think that Det Norske can easily double from the current share price." It trades near NOK90, slightly below its 52-week high of NOK97; consensus analyst targets put it at NOK125.30.