Buy Recommendation in Falling Market: Aban Offshore Company
We are all worried with the falling markets but there are still some nice gems available to invest in. One of them is Aban Offshore company. Increasing spends on oil exploration and production activities, driven by the surge in global crude oil prices, have put Aban Offshore, the country’s largest offshore oil rig service provider, in a sweet spot. Well, I have been watching this stock since last few months and I think this is the right time to invest in it now. Who should invest in this? Investors looking to play the high oil price scenario can consider investments in the stock at current market price. Aban’s large and relatively young fleet with an optimal mix of short- and medium-term rig contracts lend it strong revenue visibility over the medium term.
Besides, the current market valuation also makes a compelling case for fresh investments in the stock. At the current price of Rs 2992, Aban trades at about nine times its likely FY-09 per share earnings on a consolidated basis which is attractive in my opinion.
But you guys may need to temper your expectations on the returns front given the volatility in the broader market.
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