Dresser-Rand Shares Plunged: What You Need to Know

Anders Bylund, The Motley Fool
Updated

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of petrochemical processing equipment maker Dresser-Rand Group (NYS: DRC) spun down to an 18.1% mid-day drop on heavy volume, then jumped about halfway back to a 9% swoon.

So what: Faced with "a number of challenges" in the second quarter, Dresser-Rand reported earnings and sales below Street expectations. On the other hand, management insists on hitting earlier full-year targets anyhow as the order backlog keeps building up and some trading sanctions with a Venezuelan customer might not be appropriate after all.

Now what: Fellow Fool Rex Moore recently fingered Dresser-Rand as one of the best values available in the oil industry and related markets, right next to longtime Fool recommendation National Oilwell Varco (NYS: NOV) and industry titan Schlumberger (NYS: SLB) . These type of lumpy results might make you doubt that conclusion, but then it seems like we're talking about a short-term problem with a clear road back to solid profits. The stock has the support of 97% of more than 250 CAPS Fools, giving it a five-star rating out of five. Can all those fellow investors be wrong about Dresser-Rand? I doubt it.

Interested in more info on creative oil investments? Get on the ball:

At the time thisarticle was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Schlumberger. Motley Fool newsletter services have recommended buying shares of National Oilwell Varco. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.

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