On the surface, General Electric's announcement that it will buy Lufkin Industries just appears to be a manufacturing giant picking up an oilfield services manufacturing specialist. If you dig deeper, though, you find that this could be a big signal of what is to come in North American oil and gas production. Lufkin's specialty is building artificial lift equipment for oil and gas wells, a service normally reserved for mature wells that need a little extra help bringing resources to the surface.
With so much drilling happening in the U.S. over the past few years, there may be a big boom for this type of particular equipment in the next couple of years. With this purchase, not only is GE locking up a larger market share in this particular industry, but the high price it paid, it shows how valuable this market could be. in this video, Fool.com contributor Tyler Crowe discusses how the deal went down, and he also gives some possible investment ideas that follow this particular trend.
For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.
The article What Does GE's Recent Purchase Say About the Oil Industry? originally appeared on Fool.com.
Fool contributor Aimee Duffy has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow them both on Twitter: @TMFDuffy and @TylerCroweFool, respectively. The Motley Fool recommends Kinder Morgan and owns shares of Denbury Resources, General Electric, and Kinder Morgan. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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