An Insider at Nabors Industries Ltd. (NBR) Added 11,000 Shares

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This reversed the trend from earlier in the fiscal year, and it would be somewhat concerning if Helmerich & Payne was not able to benefit from the increase in onshore U.S. activity in the current environment of high oil prices. The stock’s forward P/E of 12 is even with that of Nabors Industries Ltd. (NYSE:NBR).

Investors can also compare Nabors to Patterson-UTI Energy, Inc. (NASDAQ:PTEN). Recent reports have shown a decline in revenue at the company, and last quarter its net income was less than half of what it had been in the second quarter of 2012. Investors seem to be expecting earnings to continue to decline but at a slower rate. The market appears more optimistic, and in fact values Patterson-UTI at a small premium to the other two companies we’ve discussed here at 13 times consensus EPS forecasts for 2014. It doesn’t seem like a good idea to buy the stock given that even if it does halt its decline it would then need to become more profitable going forward to justify the current valuation.

The insider purchase at Nabors is interesting, but it seems best for investors to hold off on buying for now. The forward P/E is low but results in the first half of this year have been tracking considerably below expectations for next year implying that analysts are looking for much stronger EPS numbers in 2014. If the company continues to struggle in its core onshore U.S. market it should prove difficult to hit analyst targets, therefore making Nabors less appealing as a potential value play.

Disclosure: I own no shares of any stocks mentioned in this article.

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