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Originally published Saturday, June 23, 2012 at 8:00 PM

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The Motley Fool: Every Sunday, useful tips on investing

Deciding what to sell; a dumb investment; taking stock in National Oilwell Varco

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Ask The Fool

Deciding what to sell

Q: I own a few stocks. One has lost value, one is about the same after several years, and some have done well. I need to pay my son's college tuition soon, so which stocks should I sell?

A: First, forget how the stocks have done in the past. What matters is each company's future.

Try ranking them by how much confidence you have in their health and growth prospects. Sell the ones in which you have the least faith. Your money should always be concentrated on your best ideas.

My dumbest investment

Lucky speculation

Dear Fool: Not so very long ago, I invested in a pink-sheet penny stock.

It was purely speculative and purely on a recommendation in an email touting a gold-mining company.

I didn't check anything out other than the stock's past performance.

It had surged recently, and once I bought, it kept rising some more.

I got scared, despite what looked like investor confidence, and bailed at nearly twice what I paid.

Today the stock is trading for less than a 10th of what I bought it at. I was dumb and didn't do my due diligence.

Fortunately, it worked out to give me a 95 percent return over the course of 20 days — but it was a stupid purchase and just dumb luck.

I learned along the way that the email promoting the company had actually been paid for by the company.

The Fool responds: You did indeed luck out. Remember that reputable and established companies don't send out emails hyping their own stock and urging people to buy. It's usually best to avoid stocks trading for less than $5 per share.

The Motley Fool take

Meet National Oilwell Varco

Though its history goes back to 1841, you probably haven't heard of National Oilwell Varco (NYSE: NOV). Still, you might want to invest in it.

With a market cap of nearly $30 billion, the company, which specializes in equipment and supplies for oil and gas exploration and production, is bigger than General Mills or Dell.

Its recent quarterly report featured revenue of $4.3 billion, up 37 percent over year-ago levels, and net income up 49 percent. Rig technology revenue grew nearly 41 percent, and the segment's backlog of orders now tops $10 billion.

The company's strengths include a diverse product line, growing oilfield-equipment demand and a healthy balance sheet, with billions in cash and little debt.

Great opportunity for the company lies in deep-water drilling and shale drilling, and it is benefiting from shorter construction cycles in Asian shipyards.

In addition, several major oil companies have discovered large new reserves and will be investing billion of dollars on new drilling rigs.

Already, National Oilwell Varco's equipment sits on some 90 percent of the world's oil rigs.

There are risks, too, of course. For example, if natural-gas prices stay low or fall further, it might not be worth spending a lot of money drilling for it in difficult locations.

With a low P/E ratio and steep growth rates, the stock looks attractive.

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