IBD 100, 2008

Grant Prideco (GRP) upgraded to Buy rating from Neutral at UBS. Price target lifts to $65 from $62 and FY 2008 eps estimates upped to $4.65 from $4.55.

80

The next student brought up Grant Prideco (GRP). The catalyst here, the student said, is that as the company finishes consolidating its facilities, its margins are going to get better. Cramer likes Transocean (RIG) which he owns for his trust better then GRP.

Oil driller supplier

oil drilling supply no brainer

The demand for the world's oil is not dictated by the U.S. anymore and the Fed meeting on Tuesday will not stop the sector's surge. Jim thinks most of the oil stocks have gone up too much except for Grant Prideco, Inc. (GRP). This company develops and manufactures the pipes and bits that all the driller companies use. They enjoy strong pricing on their products as well. Citing a presentation at the Lehman Brothers conference last week, CEO Michael McShane gave a "dud of a presentation." This should be a case of "underpromise, overdeliver." Below $55 the stock would be a steal, but Jim said the stock is worth $76.

good price, good financials, recent buyback

growth

Grant Prideco recently announced a $300 million dollar buyback which adds to its prior plan.

Oil drilling equipment and services company Grant Prideco Inc. in late July reported a 28 percent increase in net income for its second quarter ended June 30 to $135 million, or $1.04 a share, compared with net income of $105.6 million, or 79 cents a share, in the same quarter last year.

The company was subsequently upgraded by Calyon Securities to Buy.

The stock trades for 8x cash flow.