Secular Trend: Best-of-Breed Oil Service Firms

Description:

Due to the secular forces at work, it seems like Oil Service firms should be profitable investments again when oil/gas are done pulling back, and institutional moneys start flowing back into this sector. Prices may have temporarily moved up too far too fast, but it's a good bet their long-term upward trend will continue. I'm preparing watch lists for when that happens.

In compiling this list, I leaned on a few simple criteria. Each company must have:
• At least a narrow moat (Morningstar)
• C or better stewardship grade (Morningstar)
• C or better stock grade (Navellier)

These criteria resulted in a short list of stocks that also get straight A's from TheStreet.com. When the markets aren't chasing the flavor of the month, they tend to revert back to fundamentally sound companies like these.

Regardless of prices, politics, international incidents etc, the visibility in this group is pretty remarkable. Order backlogs can be measured in years, and many of their contracts with E&P firms were locked in when oil/gas prices were much lower than they are now. For investors, this may be one of the energy sector's sweet spots.

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