Pritchard Capital Adding Transocean And National-Oilwell Varco As Top Picks (RIG, NOV)

Pritchard Capital is adding National-Oilwell Varco, Inc. NOV and Transocean LTD RIG to its top picks in the oil service sector. In the research report, Pritchard writes, "We are expecting another solid quarter from the company in terms of EPS and orders. ...we continue to believe that land rig orders, pressure pumping and coiled tubing equipment, along with its PS&S division and aftermarket sales drive solid performance in the interim periods. At 11.8x 2011 EPS and 5.9x 2011 EBITDA, both substantial discounts to the peer group average by 29% and 28%, that the name should be overweight in more investor portfolios." On RIG, Pritchard writes, "...we believe the market has overreacted to the potential Macondo liability, inappropriately undervaluing the shares, and that RIG can fund potential liabilities, debt maturities, and the remaining capital commitments from its newbuild program through operating cash flows. ..."Finally, investors are giving the name zero credibility for the likelihood it reinstates its share repurchase program and $1 billion dividend."