Dril-Quip, Inc. (NYSE:DRQ)

CAPS Rating: 3 out of 5

The Company designs, manufactures, sells and services highly engineered offshore drilling and production equipment that is well suited for use in deepwater, harsh environment and severe service applications.

Recs

2
Player Avatar FoolSolo (71.17) Submitted: 2/18/2009 12:29:03 AM : Outperform Start Price: $22.77 DRQ Score: +213.72

What's not to like?

PE < 9, no debt, $110M in cash, ROE > 20%, profit margin > 20%, insider ownership > 22% and good liquidity.

With oil & gas somewhat out of favor, the market falling to near 2002 lows, this seems like a good opportunity to take a stake in good growth company with solid fundamentals and good leadership.

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Member Avatar FoolSolo (71.17) Submitted: 6/4/2010 10:13:59 AM
Recs: 0

The Gulf oil spill has hurt the stock, bringing it down from $70 to mid $40. I suspect the stock will be flat or down further from here until the BP turmoil quiets down a bit. Of course, since DRQ supplies BP with their proprietary Big Bore wellhead systems that are being used in the Gulf, they will take a nasty, muddy ride down in the gutter along with BP until this mess settles down, and that could take quite a while. In the meantime, this could be a good opportunity to add to the position. I also suspect this might make DRQ a target for acquisition, in fact there was an article on this yesterday, suggesting NOV has the cash, and DRQ would fill a nice niche for NOV.

Since their CO-CEO, Gary Smith, passed away last September DRQ really haven't missed a beat. Their earnings and guidance continue to be in line with analyst estimates, and the 3-year deal with Petrobas in Brasil signed a year ago will bring them $180MM of revs. In addition, DRQ is building a new manufacturing facility in Singapore, which will likely enhance their ability to increase sales and penetration in the APAC region.

I will be looking add shares at this level, but it could be bumpy for the next 6-9 months.

Member Avatar OklaBoston (68.80) Submitted: 10/20/2012 5:04:48 PM
Recs: 0

When you started this pick it may have been a bargain, but it's not now. PE is up to 25, so ending the pick looks like a good idea to me.

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