Also is it wise to invest in companies that subcontract the larger oil companies such as engeneering and drilling companies in the energy sector?
2006-08-03 18:19:34 · 6 answers · asked by crazytimes77 1 in Business & Finance ➔ Investing
If you're really intent on following the oil market stocks are probably a better choice. Oil Futures are like the wild west you could get screwed in a heart beat... with stocks it's a bit easier to diversify... you could own the big names like Exxon (XOM), BP (BP), Chevron Texaco (CVX).
Or you could go with an ETF (exchance traded fund) that specializes in oil. such as Oil Services Holder (OIH)
Hope this helps
2006-08-03 18:27:34 · answer #1 · answered by mash220202 2 · 0⤊ 0⤋
A great deal depends on your abilities. If you have excellent trading instincts, then oil futures are your game. If you are like the other 99% of us, then oil stocks are a better choice. Much less risk.
Now as for the drilling companies. They are more highly leveraged than the oil companies. I do not mean leveraged with debt. I mean leveraged by oil prices. If the price of oil falls, the interest in drilling wells, collapses and so do the drillers profits. If on the other hand the price of oil remains high or increases, the demand for oil drilling increases and the price of drilling increase. It has already doubled in price in the last two years. Good for drillers' profits. NBR is one of the large drillers. One of the smaller is HP. Both have PEG ratios of about 0.3 but PEs of less than 10. Both also have poor technical charts. The market does not consider them good investments at this time. Interesting.
2006-08-04 08:46:06 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Munciebirder is right on the mark with his/her analysis. What is often overlooked when looking a a company such as NBR is the question, "what are they going to do with all the cash that is rolling into their coffers?" For private companies this is no problem, but public companies are valued on their return on capital and priced on multiples of their earnings. If they earn a return of 20% on their current capital and the treasury is full of new money, investors expect them to earn 20% on it. This is not allways possible and the PE ratio contracts as record earnings are being reported. This is what is happening to the oil/gas drillers right now, PEG ratios are below 1 and no one knows why.
2006-08-05 21:33:39 · answer #3 · answered by wealthmaster 3 · 0⤊ 0⤋
This is a big no no....
Oil industry is falling, and it is making its last desperate attemp to attain all the profits they can get. few months ago, they started digging out crude oil. Crude oil, by its nature, has inferior value to "normal oil" we are used to, and takes a lot of money to process. If you took Econ or Calc in high schol or in college, see the graph: xp(x) down, p(x) (should go down but up...figure this one out...) C(x) up. And the rest is common sense...
2006-08-04 01:30:58 · answer #4 · answered by anoiktos 1 · 0⤊ 0⤋
Hi , perhaps you can get answers in this website:
http://www.bernanke.cn
a website about bernanke's talk and comment and some review. as you know, bernanke have great influence in stock, Bank, oil price, forex and so on.
Google Luck.
2006-08-04 07:24:26 · answer #5 · answered by home_insurance_expert 1 · 0⤊ 0⤋
lately, stocks.
I wouldn't bother with speculators.
2006-08-04 01:23:41 · answer #6 · answered by Anonymous · 0⤊ 0⤋