Following a recent pullback in oil services names, several of the sector's biggest constituents are looking attractive, according to CLSA analyst Mark Urness. Large cap oil service names are down 8% since the end of the first quarter, versus a 1% rise for the S&P 500, Barron's reported.
Despite still slow progress on approving new permits for offshore drilling in the Gulf of Mexico and the Senate recently voting against legislation that would have expanded offshore drilling in U.S. waters, Urness believes oil services names will continue benefiting from the North American market.
''We expect those companies with more exposure to North America, particularly pressure pumping and drilling services, to sustain earnings momentum throughout 2011. Demand for services in the oil and liquids-rich shales should continue to outpace the decline in dry natural gas drilling,'' Urness said in a note, Barron's reported.
Urness has ''buy'' ratings on Schlumberger (SLB) and Halliburton (HAL), the world's two largest providers of oilfield services, and Baker Hughes (BHI). The analyst rates Weatherford International (WFT) ''underperform.''
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