With operations in over 1160 locations worldwide, National Oilwell Varco (NYSE: NOV) is a leading provider of equipment and services to the oil and gas industry through its three segments; Rig Technology, Petroleum Services & Supplies, and Distribution & Transmission. CEO Merrill "Pete" Miller has held a number of senior executive positions with NOV, beginning in 1996. Miller also serves on the boards of Chesapeake Energy Corporation (NYSE: CHK), Offshore Energy Center, Petroleum Equipment Suppliers Association, and Spindletop International.
In this video segment, Miller says while most investors don't have specific concerns about NOV itself, some do worry about macro issues that affect the economy and the industry as a whole. On the positive side, he points to the company's technological advances, massive footprint, and talented workforce. The full version of the interview can be found here.
A full transcript follows the video.
Taylor Muckerman: When you mention their level of detail and thoroughness, they obviously had some concerns. If you could maybe just discuss the top three things that they were worried about, moving forward with National Oilwell Varco.
Pete Miller: I think most of -- it's not just them. I think most analysts, when you take a look at us, you're always going to be worried about the macro nature.
I think that, for the longest time, building rig equipment wasn't even cyclical; it was almost episodic. It just happened here, and it happened here. Well, we're past that, but I think a lot of people still are in the paradigm of saying, "Is this, in fact, episodic?" I think that's a key issue.
I think the macro economy ... are we going to continue to grow? What are the prices of oil and gas going to do? I think if you believe in the energy business, we're a pretty easy investment. If you don't believe in the energy business, then I think you have to kind of take a deeper look.
I think for the most part that the analysts that are looking at us today, it's more about, "What's the macro going to do?" and, "If the macro slows down, that's going to impact these guys." It's not so much company specific as industry specific.
Muckerman: If you're an investor looking for the positives in National Oilwell Varco, what are maybe three things that you should continually focus on to make sure that you're hitting your marks?
Miller: I think if you take a look at what we're doing with technology -- we talk about new products all the time, because you've got to keep changing your product. If you're making the same thing you made 30 years ago, you're going to have a tough time.
I think one of the frustrations that we have is that a lot of analysts don't look at the quality of the people in the company. I think we're a spreadsheet; "Here are the numbers," and that's what it is.
I would offer that if I took you around this building and introduced you to a lot of the people that are here, you're going to come away saying, "That's a motivated workforce, that's a workforce that's excited, and that's a workforce that's very talented." I think when you see that, that's great.
I think the third thing that people don't realize is our footprint. We've got 1250 locations in 62 countries. Who's going to replicate that? That is very expensive to do. It doesn't matter where you are, where you want to take that rig. West Africa? We're there. Brazil? We're there. South China Sea? We're there.
When you look at that template that we have, that's a real competitive advantage for us because I'm going to be supporting you wherever you want to drill around the world.
Muckerman: Serious barrier to entry there.
Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends National Oilwell Varco. 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.