NEW YORK ( TheStreet) -- With the noticeable improvements in global energy spending, I've spent the past couple of weeks discussing the positive effects this has had on various oil/energy companies, like National Oilwell Varco ( NOV), whose stock has reached new highs on the prospects of improved business conditions.
What's more, that Anadarko (APC) has enjoyed above-average gains over the past couple of weeks, despite litigation concerns, suggests that the Street has already priced in a full-blown energy recover. While I've remained gun-shy about chasing these offshore drilling giants, Dril-Quip (DRQ), on the other hand, despite its year-to-date gains of 55%, still seems attractive to me. And it's probably the best oil services company you never heard of.
When factoring share-price gains of 160% over the past three years, if I'm ever pressured to pick one word to describe Dril-Quip, that word would be "great." But the company's greatness has only been matched by the Street's expectations.
Even so, the difference is, unlike many of its rivals, Dril-Quip management, which has already raised guidance multiple times this year, has always delivered. It's true that at a P/E of 30, which is 6 points higher than its five-year average, this stock is not cheap. But with stronger-than-expected demand coming in from offshore energy development, not to mention the stabilizing of oil and gas prices, I still see ample opportunities here for investors looking to play an energy rebound.
Given the third-quarter results seen from Cameron International (CAM), including a 13% increase in revenues, not to mention a 50% jump in its backlog, Dril-Quip investors feared that Cameron had stolen market share and were chewing their nails in anticipation of what management's results were going to reveal. But as Dril-Quip has been known to do, it outperformed by every statistical measure.