Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of McDermott International
So what: Oil was getting dangerously close to a price where offshore oil drilling, McDermott's bread and butter, was going to be much less economically viable. As a result, the company's shares have been tanking recently until today when oil jumped more than 5%.
Now what: McDermott isn't directly affected by oil's price, but its customers' activity level is certainly affected by the price of oil. Had oil continued to dive the way it had in the last couple of days, the entire industry would have been put under pressure, especially oil drillers. It may not be company-specific news driving shares higher today, but a continued rally would have a positive effect on earnings going forward compared to the prospects if oil stayed around $75 per barrel.
Interested in more info on McDermott International? Add it to your watchlist by clicking here.