Cameron International Corporation (NYSE:CAM) — This international manufacturer of oil drilling equipment is a leading provider of oil and gas blowout preventers, flow control valves and related oilfield service products. Despite the drop in the price of crude oil, the company has maintained high profitability because of a significant backlog of subsea orders. Joint operations with giant oilfield supplier Schlumberger Limited. (NYSE:SLB) enhances Cameron’s position, increasing its backlog.
Year to date, Cameron has repurchased $1.6 billion in shares and plans to increase repurchases further this year.
S&P Capital IQ is optimistic on Cameron’s near-term outlook for two reasons. First, regulatory changes should spur demand for blowout preventer aftermarket services. Second, rising U.S. land shale activity is boosting demand in some international markets like Australia.
Additionally, many analysts are now bullish on the price of oil with some technicians indicating that the bottom has been reached at under $50 a barrel.
Capital IQ’s earnings forecast for 2015 is $3.82 per share, and its analysts have a 12-month price target of $52 on CAM stock. Raymond James Financial, Inc. (NYSE:RJ) looks for 2015 EPS of $4.65 and has a target of $63.
Technically CAM stock broke its bearish resistance line in early February, moving to a bullish “V” consolidation. Note the bullish MACD indicator, higher volume on up days than down days and its recent break of the 50-day resistance line at $46 (now provides support).
Buy CAM stock on a break through the current immediate resistance line at $49 by entering a buy-stop order at $49. My trading target is $57, the 200-day moving average. Investors may purchase shares for a longer-term objective of $65.
