U.S. Markets close in 3 hrs 3 mins

Large-Cap Service Companies are Attractively Valued in Oil Services and Equipment Space

67 WALL STREET, New York - February 26, 2013 - The Wall Street Transcript has just published its Oil & Gas: Drilling Equipment and Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Capital Expenditures and Consolidation Activity - Frontier Exploration and Development - Shale Drilling Capital Expenditures - Oil Price Expectations - Shale Drilling Dynamics - Shale, Offshore and Deepwater Drilling - Oil and Gas Price Divergence - Offshore Deepwater Oil Discoveries

Companies include: Schlumberger Limited (SLB), Baker Hughes Inc. (BHI), Halliburton Company (HAL), Weatherford International Ltd. (WFT), Diamond Offshore Drilling Inc. (DO), Ensco International Inc. (ESV), Noble Corp. (NE), Transocean Ltd. (RIG), Rowan Companies Inc. (RDC), Cameron International Corporat (CAM), FMC Technologies, Inc. (FTI), National Oilwell Varco, Incorp (NOV), Helmerich & Payne Inc. (HP), Nabors Industries Ltd. (NBR), Patterson-UTI Energy Inc. (PTEN), Petroleo Brasileiro (PBR) and many more.

In the following excerpt from the Oil & Gas: Drilling Equipment and Services Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Where are you pointing investors now? What are some of your favorite stories?

Mr. Gruber: As I mentioned earlier, the integrated service companies are the most interesting. We forecast about 27% earnings growth for the group from 2013 to 2014. Right now, valuations reflect the anticipated earnings for 2013, so if we're right about that 27% rise, the group's stocks should get a sizable bump in 2014, assuming no major changes inthe macro that would cause multiples to change.

You have an enhancement of the cash return profile amongst the big three, and the smallest company, Weatherford, is focused more on capital discipline and deleveraging, which should enhance their position going forward.

When I see a group that is as attractively valued as the large-cap service companies are, I tend to gravitate towards quality. There is a consistent theme through the industry which is the winners continue to win, and the investor base knows this, so they tend to gravitate towards the higher-quality names first and then play the turnaround stories later.

So near term, we're recommending Schlumberger and Halliburton, the two highest-quality names. I also see the great prospects for Baker Hughes to improve their margins in the second half of the year and into 2014, so over the course of the year, Baker Hughes becomes more attractive.

TWST: Can you tell us about more about Cameron?

Mr. Gruber: When you look at the reporting structure, it's not easy to decipher how the major themes within oil and gas impact the company. I believe the company's growth prospects are underappreciated even by a group of sellside analysts...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.