Breaking Down The OIH

Here’s a closer look at the 18 stocks in the Oil Service Holders ETF (OIH). This has become one of the most popular exchange-traded funds on Wall Street. Since May 13, the ETF is up 75%.
I’ve thought that this sector has been overpriced for some time. Yet, despite what I think, the stocks keep going up, up, up.
With this chart, I wanted to show you just how high Wall Street’s expectations are. Look at the projected five-year growth rates. It’s rare for a company to grow its earnings 20% a year for five years, much less 30% or 50%. Thess projections are very optimistic.
Note: This is a corrected version of my original post where I had listed the 35 stocks in the Dow Jones Oil Equipment Services Index. Thanks to Roger Nusbaum for pointing me in the right direction. You can see more info on the OIH here.

Symbol Company Proj. Five-Year Growth Rate Forward P/E Market Cap
BHI Baker Hughes 15.0% 21.6 $24.8
BJS BJ Services Company 22.0% 19.6 $12.9
CAM Cooper Cameron 16.0% 23.1 $5.4
DO Diamond Offshore Drilling 40.0% 15.6 $10.4
ESV ENSCO International 44.0% 12.2 $8.0
GSF Globalsantafe 45.0% 14.0 $14.1
GRP Grant Prideco 25.0% 18.9 $6.2
HAL Halliburton 17.5% 20.0 $38.1
HC Hanover Compressor 7.5% 53.8 $1.5
NBR Nabor Industries 58.8% 13.0 $12.3
NOV National Oilwell Varco 25.0% 23.2 $12.4
NE Noble 43.0% 15.0 $11.3
RDC Rowan Companies 25.0% 12.9 $4.7
SLB Schlumberger Limited 17.5% 26.7 $72.3
SII Smith International 17.0% 21.1 $8.8
TDW Tidewater 29.0% 12.8 $3.1
RIG Transocean 50.0% 17.6 $25.5
WFT Weatherford International 25.0% 21.0 $15.0

Posted by on January 26th, 2006 at 3:58 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.