When I notice that a company's share price has fallen about 20% in a month, I'm inclined to take a closer look. That's especially true when, like Oceaneering International (NYSE: OII), it operates worldwide with minimal competition in a vital and expanding industry.
The Houston-based company provides products and services to the offshore oil and gas industry. Originally, it was largely a diving entity, but it now also provides a wide array of sophisticated deepwater offerings, including remotely operated vehicles that can travel to depths well beyond where diving becomes impossible.
And while the company's business is mostly tied to private energy companies, it also works for the U.S. Navy, NASA, governments, and nonenergy companies around the world. Indeed, earlier this year, it located a German submarine that had a crew of 70 when it was lost off Alaska about 65 years ago.
So it may be that the recent slide in some oilfield-service names has also nicked Oceaneering along the way. But given both its unique position in the industry and the progressive move to deep water in the search for oil and gas, it's tough to imagine Oceaneering not expanding and prospering in the future.
And while the company is not wholly without competition -- like Superior Offshore (Nasdaq: DEEP), a smaller, diving-oriented company also based in Houston -- few companies have the field (or the seas) to themselves to the extent that Oceaneering does.
In the quarter ending in September, the company increased its earning 40% year over year, and it's expected to increase its annual EPS about that much as well. Interestingly, with the oilfield services industry perpetually criticized for volatility, Oceaneering's beta is close to 0.75, indicating that its share price doesn't fly around as much as the general market. In fact, on this basis, it's far more settled than such big service players as Halliburton (NYSE: HAL), Baker Hughes (NYSE: BHI), and Weatherford (NYSE: WFT).
I suggest my Foolish friends with a yen for the oil patch take a hard look at Oceaneering. This one's likely moving up by heading down.
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