Best on the Street 2000 Analysts Survey: Oil: Equipment & Services
When analysts surveyed the wasteland of oil-equipment and services companies in early 1999, they saw a sector littered with companies not only down but nearly out.</br></br>"Things were abnormally beat up," said Marshall Adkins of Raymond James & Associates, who took second place among stock pickers in the category in this year's Best on the Street Analysts Survey. "There were fears in the marketplace that some of these companies wouldn't make it."</br></br>Compounding those fears was an industry caught up in merger paralysis, with the big integrated oil companies focused on getting leaner at the expense of the new field development on which the service companies depend.</br></br>So, after oil prices bottomed out in the spring, savvy analysts pounced on companies leveraged to North American natural-gas drilling, which is controlled by smaller independent companies that were more likely to put rigs back to work sooner. The reward: triple-digit returns for several companies.</br></br>"We were surprised that the oil-price crash of 1998 lasted as long as it did," said Matt Conlan, 31 years old, of Prudential Securities, who took top honors among stock pickers in the category. The secret of his success? "We were very early to hop on the stocks that we thought would recover first and fastest and strongest."