I like what I read about NOV. The fundamentals seem compelling, particularly in lieu of NOV supposedly possessing a business moat in the "floating, production, storage, and offloading" of an oil drilling industry set to undergo a secular growth cycle in the next decade. This especially seems true for North America.
I like the financials. Solid cash flow due to having no cyclical business components. Not too bad debt. A PE of around 12 seems reasonable. I read that the company is optimizing the supply chain involved in its operations. All in all, it seems like a reasonable stock to hold from 3 - 10 years.
Any thoughts or opinions?
Thanks everybody for rounding out my information & understanding of NOV. I especially didn't consider any government legislative impact on their core business, something I will look into. Assuming there is nothing seriously wrong here, I'm going to take an initial position, holding another 50% with the intent to double down if things go significantly south.
I'm fairly convinced this is a good long term hold. I like to think patience will be rewarded here.
I again, I appreciate the thoughtful comments. Best of luck to all of us on this stock.
9.91 forward PE and .72 PEG ....this is cheap and just reported a strong quarter, except for domestic land based operations. It has state of the art products for off shore and is the industry leader...this is as strong a bet as I can see, and I hold it..........
Your right about the business being difficult to get into. NOV is the leader also. Currently, NOV fundamentally is cheap. The world will always need oil. I am in it for the long term. I will hold and if it drops considerable, I will double up my position. Unless, there is a material change in NOV's business, industry or it becomes overvalued I intend to hold. After the next two quarter reports comes out, I'll see what they say and take it from there. Personally, if I did not have a position already, I would take one now. But with the though process of holding it for 10 years and with the intent to double my original position if the stocks price drops 30 - 50% from my original position. That's as long as there is not a change as discussed above or if Warren Buffett sells his holdings in NOV.
Warren Buffett has bought into NOV over the past 6 months so if it is good enough for Mr. Buffett it is good enough for me. Now if he sells then I will also probably sell since I will consider it a material change, I got my information about Buffett from FDMResearch.
I think the current sell off is traders speculating on the industry slowing in the first half of the year. I don't like to speculate. I also don't try to time the market unless where talking about a bubble. I plan to hold NOV for 10 years. I am pretty confident in 3 years it will be higher than what it is now.
Hope this helped.
Before emulating WB, consider his ConocoPhillips investment 5-6 years ago. He bought into an oil & gas company, speculating about the demand and price, and lost billions. I trust that he learned a lesson, but he also demonstrated that he is far from infallible.
It sounds like you are doing your homework with the fundamentals, so I will look at a few macroscopic qualities.
Positive: The company and management are generally regarded as stable and solid. They participate in a market with demand that is far more likely to increase than decrease in the next few years.
Negative: The federal administration does not favor oil & gas. Revenues have stumbled a bit over the past few years.
Summary: I consider the company to be sound, but perhaps not the best place to park money over the next 3 years. If you are risk-adverse, then consider watching cabinet appointments before pulling the trigger. Recall that the previous cabinet included Ken "boot on the neck of BP" Salazar and Steven "$500M to Solyndra" Chu. Biofuel stocks spiked over the past week after increased mandates to use biofuels that have not even hit the market yet. These are not reasonable people, let alone oil-friendly.
Morningstar has a buy price at $68.50. With this whistleblower suit it looks like it will get there and lower. NOV has to come out with something to stem the bad PR and make shareholders feel the suit is without merit.
if suit has merit,it will be a major disastor. If they did not do due quality control,there may be defective pipes down in new wells, They may have to retrieve that #$%$ and nov will be BP all over again.
Price fell below the bottom of the P&F chart 'hi pole' pattern this morning and got no bounce.
NOV should make a strong statement or fwill face suits if worse case scenario happens.