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Actionable news in NOV: NATIONAL OILWELL VARCO Inc,

National Oilwell Varco Is 45% Overvalued


NOV's Q1 revenue and EBITDA fell Q/Q by 20% and 60%, respectively.

NOV is up 8% since earnings. Bulls are assuaged by the company's pristine balance sheet.

Based on run-rate EBITDA the stock is worth $17 or 45% below its current trading value.

A disappointing Q2 could bring NOV's waning liquidity into focus and cause the stock to sell off.

Source: Getty Images

When it comes to best-in-class oilfield services companies National Oilwell Varco (NYSE:NOV) is often mentioned in the same breath as Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL). That's why NOV is up about 8% after reporting dismal Q1 results. Bulls point out that the company has a pristine balance sheet and will definitely survive the downturn in the oil and gas industry. However, I believe investors have ignored the fundamentals and gotten too enamored with "brand name" stocks.

National Oilwell's Q1 revenue and EBITDA were down sequentially by 20% and 60%, respectively. The free fall in the U.S. rig count and shale plays fighting for their own survival has ravaged National Oilwell and...