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The Money Man Behind Rick Santorum: Who Is Foster S. Friess?This 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.
"Oil recently suffered a pullback, but we think it's temporary," says Brandon Clay, who turns to the oil sector for his top pick for 2010.
The editor of Invest with an Edge suggests, "One stock that should pull out of congestion when energy moves again in 2010 is Oceaneering International (OII), a company involved in deep-water drilling services.
Clay continues, "The Texas-based oil and gas services company gets most of its revenue by providing goods and services to companies that are drilling for oil and gas offshore. One of their specialties is deep-water remotely-operated vehicles (ROVs), or 'robots' in layman's terms.
"Oceaneering has turned a profit every year since 1999, including a record $3.65 a share in 2008. Analysts are forecasting a drop to $3.38 a share for 2009, but they also expect a nice rebound to $3.51 a share in 2010.
"The shares still appear inexpensive at just 16 times forward earnings. The firm's balance sheet is in good shape with just $140 million in debt and nearly $96 million in free cash.
"Oceaneering fills a unique niche in its industry. They help oil and gas explorers drill in deep water locations hundreds of miles offshore. Its services are expensive, but producers like Chevron and Exxon Mobil have little choice if they want to replace their reserves.
"OII is in a market sweet spot. For an indirect play on rebounding crude prices, go with oil services performer Oceaneering International."
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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