Introducing National Oilwell Varco, a “Warren Buffett stock”
Must-know: An analysis of National Oilwell Varco's financials (Part 1 of 16)
National Oilwell Varco
National Oilwell Varco Inc. (NOV) is a U.S. company that provides oilfield services and equipment and parts used in oil and gas (O&G) drilling and production. So the company’s fortunes are tied to O&G prices, which affect exploration and production companies’ inclination to drill for oil and gas.
NOV’s closest peers and competitors include companies like Schlumberger (SLB), Halliburton (HAL), and Baker Hughes (BHI).
Operational overview
Until recently, NOV operated through three segments:
Rig Technology
Petroleum Services & Supplies
Distribution & Transmission
However, in May this year, the company spun off its distribution business into a separately traded company, DistributionNOW (DNOW).
Following the separation, NOV reorganized its operations into four segments (described in the image above):
Rig Systems
Rig Aftermarket
Wellbore Technologies
Completion & Production Solutions
A “Buffett stock”
As of 2Q14, Warren Buffett’s Berkshire Hathaway (BRK.B) held ~7.5 million shares or ~1.7% of NOV’s shares in its portfolio. While NOV isn’t among BRK’s top holdings—and BRK isn’t among the top holders of NOV stock—NOV’s inclusion in BRK’s portfolio says a lot about the company.
This series studies National Oilwell Varco’s financial performance over the last seven years to help you understand why the company has earned the privilege of becoming a Buffett stock.
Key ETFs
ETFs are a great way to gain low-cost, diversified exposure to various sectors—and even broad markets.
NOV is part of the O&G equipment and services sector, which you can track via the Market Vectors Oil Services ETF (OIH). OIH counts SLB, HAL, NOV, and BHI among its top five holdings.
Browse this series on Market Realist:
