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 McDermott International (NYS: MDR) jumped 13% today as oil prices rose.
So what: Oil was getting dangerously close to a price where offshore oil drilling, McDermott's bread and butter, was going to be much less economically viable. As a result, the company's shares have been tanking recently until today when oil jumped more than 5%.
Now what: McDermott isn't directly affected by oil's price, but its customers' activity level is certainly affected by the price of oil. Had oil continued to dive the way it had in the last couple of days, the entire industry would have been put under pressure, especially oil drillers. It may not be company-specific news driving shares higher today, but a continued rally would have a positive effect on earnings going forward compared to the prospects if oil stayed around $75 per barrel.
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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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 has a disclosure policy.
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