Many oil and natural gas service companies called the fourth quarter of 2012 a trough in the North American market. By all accounts so far during this reporting period, that appears to be especially prescient. International heavyweights Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) both witnessed signs that a second half turnaround us likely upon them and the industry as a whole.
What does that mean to Warren Buffett?
Well, a lot, really. For the last couple of quarters, Buffett has been adding stock in National Oilwell Varco (NYSE:NOV) to his portfolio and for what appears to be good reason. The company is modestly priced compared to peers and has its hand in both on-land and offshore drilling markets. Replacing parts on rigs and upgrading global fleets is Varco's business, and there are no shortage of customers.
With a great management team in place, tack-on acquisitions have created a full-service company that counts the majority of the drilling world as customers. If the conference call on Friday isn't full of positive news, I would be highly skeptical as to why after following the activity during the past week.
Joel South owns shares of Schlumberger. Taylor Muckerman owns shares of Halliburton. The Motley Fool recommends FMC Technologies. It recommends and owns shares of Halliburton. The Motley Fool owns shares of 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.