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Savings Experiment: Snow RemovalThis post is part of a special report, Top Picks for 2010, the 27th annual survey in which TheStockAdvisors.com asks the nation's leading advisors for their single favorite stock for the new year. See all 80 stocks listed here.
Value investor Charles Mizrahi looks to Noble Corp. (NE) as his top investment idea for the coming year.
In his Hidden Values Alert, the advisor offers his bullish assessment for the company, a Cayman Islands-based company involved in offshore drilling contracting for the oil and gas industry.
Mizrahi explains, "Noble Corp. has a fleet of 63 mobile offshore drilling units located worldwide. Its fleet consists of 13 semisubmersibles, four dynamically positioned drillships, 43 jackups and three submersibles. The fleet count includes five units under construction.
"Some 87% of its fleet is deployed in areas outside of the United States, principally in the Middle East, India, Mexico, the North Sea, Brazil, and West Africa.
"The company generated more than $1.6 billion in free cash flow over the past twelve months. NE has a $9.6 billion backlog that goes all the way out to 2016. It employs very little leverage and returned a hefty 29% return on equity.
"Overall, Noble is a well-run business, and a price of $42 or lower per share represents a very good value.
"If Noble Corp. can grow its earnings at only 5% per annum and maintain a price to earnings multiple of 9, then the stock will handsomely reward investors during the next five years."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stocks of the nation's leading financial newsletter advisors.
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