To support his case, D’Altorio notes that two Norwegian oil service companies have already acted on depressed prices. Acergy and Subsea 7 engaged in an estimated $5.4 billion merger, while Noble Corporation acquired FDR Holdings for $2.16 billion in cash.
It is of note that Subsea 7 owned an impressive $5.3 billion backlog when it merged with Acergy, and FDR Holdings had a $3.2 billion backlog when it was acquired. This goes to show that perhaps these companies have been, as D’Altorio thinks, overly sold-off.
If indeed the oil services sector has been overly sold-off, then investors should keep a close watch on related exchange-traded funds (ETFs). By using ETFs, investors should be able to mitigate some of the risk of holding onto speculative stocks, while participating modestly in a potential upswing. [Long-Short Oil ETFs.]
To find ETFs above or below their 200-day moving average, you can put a few of our new tools to use. Our ETF Analyzer allows you to sort any ETF by 200-day. Our Alert tool lets you have price and trend alerts sent straight to your inbox so you never again miss a trading opportunity.
For more information on oil, visit our oil category.
- iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (NYSEArca: IEO)
- iShares Dow Jones U.S. Oil Equipment & Services Index Fund (NYAR: IEZ)
- PowerShares Dynamic Oil Services (NYSEArca: PXJ)
- SPDR S&P Oil & Gas Equipment & Services (NYSEArca: XES)
Sumin Kim contributed to this article.