Four Drilling Stocks for Value Investors

This was originally published on RealMoney. It is being republished as a bonus for TheStreet.com readers.

We all know what has happened to oil prices. Fears of global shortages that drove prices up to near the $150-a-barrel level have subsided, and oil prices have since fallen by about a third. The oil-service stocks that had such a dramatic price run-up have declined right along with the base cost of energy.

Since July of this year, the Oil Services HOLDRs(OIH Quote) has fallen in price from over $220 down to about the $160 level. I am a bottoms-up investor and don't usually take notice of a particular industry until it becomes extremely overvalued or undervalued. Right now, when I run screens for low-valuation stocks, many of the oil services and drilling companies are popping up. I believe this represents an opportunity for traders and investors alike.

Although worldwide demand has slowed in recent months, I believe this decline is temporary. The current global economic situation may dampen demand in the short run, but eventually it will recover and continue to grow. In spite of all the election-year posturing about developing new energy sources, the truth is that petroleum will remain the world's major fuel source. Emerging markets will continue to grow, and their demand will increase in the long run. ...