In the video below, Fool analysts Jim Mueller and Austin Smith discuss some reasons why investors in National Oilwell Varco (NYSE:NOV) might consider selling the stock.
Investors should always be aware of potential red flags marking their investments: Three flap above NOV. The first is the volatility of oil prices. NOV's share price is tied to the price of oil. If investors are not comfortable with that level of volatility, they should consider selling the stock. Secondly, as oil rigs push the limits of drilling in deeper water, the risk of accidents rises. If an accident occurs and involves one of NOV's products, it could hurt the company financially and damage its reputation. And finally, NOV owns 60% of the market in which it operates. That means it has little room to extend. So while its position remains dominant, growth becomes more difficult to achieve.
Austin Smith owns shares of National Oilwell Varco and Halliburton Company. Jim Mueller owns shares of BP, National Oilwell Varco, and Transocean. The Motley Fool owns shares of Halliburton Company and Transocean. Motley Fool newsletter services recommend Halliburton Company and National Oilwell Varco. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.