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The Money Man Behind Rick Santorum: Who Is Foster S. Friess?"National Oilwell Varco (NYSE: NOV), a buy in our 'Wildcatters portfolio,' will see an outsized benefit from improving conditions in the global oil market," says Elliott Gue in The Energy Strategist.
"Rig technology is the crown jewel of National Oilwell's business; the unit builds key equipment used on land and offshore drilling rigs.
"The unit is currently benefiting from the boom in deepwater drilling activity -- one of the only drilling markets that continue to see growth.
"Equipment used on deepwater drilling rigs is far more complex and expensive than that used on land or shallow-water rigs. As a result, selling equipment into the deepwater market carries far higher profit margins for National.
"National Oilwell's stock price did decline slightly following its first quarter earnings release in late April. That decline was a great buying opportunity. Since then, the stock has rebounded and recaptured its post-earnings decline and then some.
"One potential ongoing catalyst for National Oilwell is a series of major deepwater oil projects being managed by Brazil's national oil company, Petrobras.
"Petrobras has announced several major discoveries over the past year and a half and should be releasing more data on the potential for these fields in coming months.
"Petrobras will need at least 28 new ultra-deepwater rigs to develop all of the fields it's found, and a new ruling from the company's government regulator may force it to accelerate the development of these fields.
"This would, of course, mean more business for National Oilwell, a key supplier of equipment for such rigs. National Oilwell Varco remains a buy."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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