It doesn't feel like it was all that long ago when National Oilwell Varco (NYSE:NOV) was a darling in the energy equipment space. Sure, there was always strong cyclicality
to the business and the stock (as the multiples tend to expand and
contract with the book-to-bill ratio), but this was one of the companies
that consistently got above-average multiples and the benefit of the
doubt.
Now, though, investors' enthusiasm has turned more toward those
companies with bigger subsea and offshore surface exposure, companies
like FMC Technologies (NYSE:FTI) and Cameron (NYSE:CAM)
for instance. Although I don't want to suggest that investors should
ignore the risks that National Oilwell Varco will struggle to improve
margins, that the equipment cycle peak is in sight, and/or that the
company will be challenged to expand into subsea and surface, today's
discount to historical multiples and current rivals seems a bit
overdone.
Please follow this link for more:
http://www.investopedia.com/stock-analysis/061413/can-national-oilwell-varco-win-back-love-nov-cam-ge-fti.aspx
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