Roberto PedoneWINDERMERE, Fla. ( Stockpickr) -- Almost any stock that has the word "oil" in its name has been absolutely beaten down due to the BP ( BP) oil spill in the Gulf of Mexico. Investors have been dumping the oil-related stocks now and asking questions later out of fear that they could be holding the next BP -- or even something worse. Of course, the market has a tendency to overdo the selling on the downside in times of a crisis. That could be the case right now in the oil patch since many of the related stocks have been sold off to very compelling valuations. During the last three months, oil drillers have been crushed, with Transocean ( RIG) shares down 39%, Diamond Offshore Drilling ( DO) down 28%, Rowan ( RDC) down 20% and Noble ( NE) down 23%. All of these names are presenting investors with an opportunity to buy at very cheap valuations. For example, Transocean is trading at a P/E of just 5, and Noble is changing hands at a P/E of only 6. The smart money on Wall Street is also starting to find values among the offshore drillers. On Monday, Greenlight Capital, the hedge fund firm run by David Einhorn, acquired a 5% stake in London-based offshore driller Ensco ( ESV). According to SEC filings, Einhorn bought 7.4 million Ensco American depositary receipts. Clearly, Einhorn sees a big opportunity in Ensco, with the stock down 14% in the last three months. Before we take a look at some other oil-related stocks that could be great buying opportunities, let me say that one stock in the space I would continue to avoid is the cause of the sector's problems in the first place, BP. BP has seen a tremendous run recently, surging more than 33% in just the last couple of weeks, but I suspect that most of that move has been short-covering in anticipation of the company capping the well. What's troubling about BP is that it appears to be conducting a fire sale of its assets instead of rebuilding its brand. Not to mention that nobody really knows the true amount of legal liabilities the company is going to face until the disaster in the Gulf comes to an end.
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