If you hitched your train to Cameron International Corp. (NYSE: CAM) in late April, as recommended on April 24, 2009, you're up a nice 40%. And that's before the next oil boom begins.
Hence, I'm reiterating my Buy rating for Cameron, first recommended at a price of $25.59.
Further, Wall Street's irrational oversell of CAM ended this quarter, with institutional investors bidding-up shares, on likely ramping oil demand.
And that means CAM's valuation thesis -- longer-term demand for oilfield capital equipment and deepwater support equipment -- is as strong as ever. But CAM is not as cheap as it was in April, and the current price level probably represents your last chance to earn an outsized gain. The First Call FY2009/FY2010 EPS estimates for CAM are $2.19 to $1.99.
Stock Analysis: Cameron International is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in CAM now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your CAM position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $12.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
8-21-2009 @ 5:46PM
Iridium said...
I wouldn't buy any oil stocks right now if you intend to hold them for more than a couple months.
I love how you say the price is up 40% even before the next oil boom. There is no next oil boom, only a manipulated market boom. Oil demand will not increase by enough to even justify $25 a barrel let alone the price heights oil can hit if the market terrorists are allowed to keep operating as they have been.
The global economy can't lend support to oil above $40. If oil goes above $100 you can kiss any hope of recovery good bye. $200 oil would cripple the economy so severely that we could drop to the stone age.
Oil traders are now public enemy #1 and anyone supporting the oil trade market is an accesory to domesitc terrorism on a grander scale than Osama can ever dream.
We haven't heard a peep from the death to America crowd because we did what they set out to do with greater success than any operation they could mount.
THANKS WALL STREET!!!!