NEW YORK (TheStreet) -- National Oilwell Varco (NOV) is one of the better-run names in the energy sector today. Despite prolonged, weak oil prices, the company is returning cash to shareholders via its three-year $3 billion share repurchase program.
But even with the buying opportunity created by shares being down 10% for the year to date, owning this stock is not for the squeamish. If you like volatility, this is your stock.
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Since reaching a 52-week high of $86.55 on Sept. 2, shares of the provider of drill rig equipment, downhole tools and supply chain integration services have fallen more than 22%, reaching $67.25 on Oct. 15. As it has done over the past year, however, the stock rebounded, climbing 11% from that low to reach $74.65 on Oct. 29.
The chart below, courtesy of Google Finance, shows the volatile nature of National Oilwell. With each peak comes a valley. After two valleys, it's time to buy, especially since the stock still has a high analyst 12-month price target of $100, which calls for 44% potential gains.
It's been two years since National Oilwell shares saw a drop that massive. It occurred in September 2012 when the shares fell 23.5% from a high of $84.83 to $64.87 in the following December. The stock then went on to reach its recent high of $86.55 two months ago for a 33% gain.
It's not surprising why National Oilwell stock has suffered recently. Crude oil prices have fallen 14.7% over the past month, according to CNN Money. The price of light crude was last quoted at $77.19, which is down 17.68% over the past year. Investors are in a panic that oil prices will remain low for an extended period of time. It's a risk. But it's also an opportunity.