Dykstra: Taking On the Big Unit

On Wednesday, we saw the market take a big hit the morning after Merrill Lynch(MER Quote) reported a whopping $7.9 billion writedown, only to end the day with minimal overall damage.

The current market seems to regain its legs after each significant fall, but only time will tell the true effect that the subprime crisis will have on the financial sector, the stock market and the economy at large.

While I generally like to buy beaten-down companies, my approach remains cautious in regard to financials. Now is the time to focus on industries with relatively inelastic demand; these companies can better withstand difficult economic conditions. With oil continually moving toward record levels, that industry provides many investment opportunities.

Today I would once again like to focus on Unit(UNT Quote), a company that both drills for its own account and provides contract-drilling services. I have written about this company on several occasions -- most recently Oct. 4 -- and I believe that with oil at its present levels, Unit will once again continue to move higher. ...