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) climbed 10% on Wednesday after Wall Street firm Stifel Nicolaus initiated coverage on the offshore oil and gas contractor with a "buy" rating.
So what: Along with the upgrade, Stifel planted a $16 price target on the stock, representing more than 55% worth of upside to its Tuesday closing price. The stock has been battered over the past several months -- off about 60% from its April highs -- on spiking costs and large writedowns, so today's upgrade might be a sign that McDermott is finally cheap enough for Wall Street to jump back in.
Now what: Don't let today's pop keep you from looking into the stock. Fools know never to blindly follow fickle analyst calls, but given its solid balance sheet and edge in emerging markets, McDermott seems like a solid pick. More importantly, with the stock trading at a P/E discount to peers like Jacobs Engineering (NYS: JEC) and Fluor (NYS: FLR) , it's an inexpensive one as well.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 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 Fool's disclosure policy always gets a perfect score.
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