National-Oilwell Varco, Inc. (NOV) Is Still Hitting on All Cylinders

An order jack-up
While the rapidly increasing activity in deepwater and ultra-deepwater in places like the Gulf of Mexico and Angola continues to receive major attention, it’s also worth noting that new or upgraded jack-up equipment continues to be added globally. One result for National-Oilwell Varco, Inc. (NYSE:NOV) has been the receipt of orders for 17 jack-up packages during the first quarter, another dozen in the June period, and expectations that the strong flow will continue through the current quarter and beyond.

Going up by going down
I’ve recently discussed the exponential growth in subsea production and its benefits for the likes of Cameron International Corporation (NYSE:CAM) and Schlumberger Limited. (NYSE:SLB) — through the formation of OneSubsea, their new joint venture charged with developing and providing sophisticated technology, equipment, and systems for working on the sea floor. Ditto General Electric Company (NYSE:GE), which has also achieved a leadership position in facilitating subsea completions and production.

But don’t get the idea that National Oilwell Varco is a bystander as offshore production dives deeper. Given a “strong order intake for subsea production products”, the company now sports a more than $800 million backlog for subsea products.

Foolish takeaway
So, while there were some weaknesses for National-Oilwell Varco, Inc. (NYSE:NOV) “at the margin”, their causal factors are almost certainly transitory. However, the conditions that have powered the companies substantial strengthening and expansion are far more likely to linger, making its shares a sagacious choice for investors with a preference for the oil-field services sector.

The article National Oilwell Varco Is Still Hitting on All Cylinders originally appeared on Fool.com and is written by David Smith.

Fool contributor David Smith has no position in any stocks mentioned. The Motley Fool recommends National Oilwell Varco. The Motley Fool owns shares of General Electric Company and National Oilwell Varco.

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