Baker Hughes (BHI): An oilfield 'bargain'

Resource expert Curtis Hesler suggests Baker Hughes (NYSE: BHI) is an "excellent company that is on a strong growth path." In his Professional Timing Service he explains, "Everyone in the world is going to be scrambling to drill for oil, regardless of the U.S. economy.

"My futures work on crude is interesting here as we are about to leave the seasonal weak period and enter seasonal strength. My futures model has been on the sidelines in crude; but on February 11, it issued a buy at 92.72, March basis.

"It is all but impossible to drill for oil without Baker Hughes. Regardless of whether you think a recession has begun in the U.S., the truth is, there is a whole lot of drilling going on around the world. That trend will continue.

"Most recently, Kuwait announced they will be spending $51 billion over the next five years to upgrade their energy sector. They are going to be drilling a lot of wells. All of the other producing nations are going to do the same, and for one essential reason. They are all seeing their production levels beginning to decline.

"Due to a weak overall stock market and a 'disappointing fourth quarter earnings report,' Baker Hughes' price had been pushed back to solid long term support just under $65.00.

"This time, Baker reported $1.26 a share for the quarter while the analysts were looking for $1.28. Personally, I was not disappointed at all. The quarter's earnings were up a hefty 23%. If they do that every quarter, I am not going to worry about a two-cent disagreement between a bunch of pencil pushers.

"The stock's RSI and MACD patterns are deeply oversold now, and there have been very nice moves following readings in this area in the past. Come next fall, I think you will rue not having put a few bucks in Baker when the time was right. Today's bargains are in energy."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.