I've had the fortunate experience to own two oil services companies that have been purchased. First was THE, purchased by HERO. Today, CalDive is buying Horizon Offshore of which I have 500 shares. I had also picked up HERO when it tanked after the news of the purchase. I actually made more money on HERO than I did THE. I also sold THE too soon. The purchase price was a combo (like CalDive) of stock and cash, so part of THE's purchase price was tied to HERO's. So I could have doubled my pleasure by holding both, but there was risk in that, and I didn't want the double jeopardy either!
There's been speculation of consolidation in the oil services area, but much of that has focused on the larger names. Both THE and HOFF have been under the radar. Lehman publishes some excellent industry reports, and oil services is no exception. I always do my own due diligence, and I picked up HOFF based on that work.
4 comments:
For value investing I would probably start with one of the following:
VAALCO Energy Inc.
BP Prudhoe Bay Royalty Trust
Frontier Oil Corp.
I have invested and made money on oil industry value stocks, but I don't know enough about the industry to feel that I have any edge at all.
Thanks for floating these names. I owned BPT some time ago and did well with it. Too many problems as a company for me to be interested in it now, though the dividend yield is terrific. FTO is great, but I do not own it. I'm not familiar with Vaalco (EGY).
I like the oil services better than the oil companies. They tend to not be as well covered and for that reason you will find some real gems. The best performing stocks that I have owned have been from this sector.
Oh...I did pick up some UNG (natural gas ETF). It keys off the futures not the spot price of natural gas.
The three are all cigar butt value stocks of some sort.
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