Monday, March 31, 2008

Good Report From Noble/End of Quarter Thoughts

Noble Drilling (NE) is a stock I've recommended strongly since last May. Today they reported that they signed a deal to drill off the Brazilian coast with new contracts through Petrobras (PBR). This is great news. Petrobras has been a hedge fund darling after their large offshore discovery last year. The offshore drillers have seen increased demand as oil becomes more difficult to come by. Noble is a company that I've liked because it has higher profit margins than its peers, drills in more international locations, and trades cheaper. Good news there moving forward.

The overall market is seeing some more weakness as we stumble through the end of Q1. I think investors are a little worried about how earnings will come in. The government is announcing new action almost daily, but no one seems convinced it will help in the near term. It appears they are putting more rules into place to prevent a future situation like the one we're currently in.

I continue to like large-cap, non financial stocks. Industrials (think GE, Boeing, United Tech) are continuing to perform well. Take a look at Vanguard's industrials ETF symbol (VIS). It has a large exposure to GE, and a mix among many other large-cap industrials. It also carries the lowest expenses of the industrial ETF's.

Disclosure: Long NE.

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