Navellier Growth: your source for market-beating growth stocks

 

Oil is high and going higher. Prices hit $105 a barrel level recently, and $4 per gallon gasoline seems highly likely this spring. Given that demand for petroleum products is growing in spite of the high price levels, the black bubbly is not likely to make any large downward price moves anytime soon. That's great news! If you own the oil service stocks that are in our Blue Chip Growth portfolio, that is.

Higher prices at the pump may be just the ticket to driving your portfolio to new highs in 2008. As with the food stocks, we don't necessarily want to own the stocks of the big companies that own all the oil right now. Instead, we want to own the companies that drill for oil or provide other services to the petroleum industry. We have several oil drillers in the portfolio, and I think the recent stock market pullback makes this the perfect time to invest in these powerful growth stocks. With demand still high, we are going to need to find new oil services. We will. Many companies are finding more even as we speak, and these new fields are a tremendous source of potential profits.

One of these oil service companies has a red-hot hand right now in the search for new oil. FMC Technologies (FTI) just got an eye-popping $980 million contract for deepwater drilling off the coast of Angola. In addition, the company announced that it was spinning off its non-core Foodtech and Airport divisions to focus solely on its highly profitable oil service. A smart move, if I ever saw one.

While the S&P 500's earnings were down a massive 12% in the fourth quarter due to the continued mortgage-related write-downs and other major problems with financials, the earnings of oil service companies have been growing rapidly. The worldwide search for oil is expanding, and analysts expect the oil stocks' profits to keep flowing well into 2009. Cameron International (CAM) sells flow equipment to oil and gas producers around the world. Business has been red hot and is expected to continue to be so. Just recently the company announced a two-for-one stock split and its full-year prospects are excellent.

There's more where that came from

And that's just two of the oil-related companies on my Blue Chip Growth Buy List; we own seven oil-related stocks in total. My Blue Chip Growth subscribers know how much I like the industry giant that has seen its earnings triple since 2005. Its growth will continue to be robust. It recently purchased another company that expands their fleet of seismic marine vessels used to search for oil.

My Blue Chip Growth subscribers have already made 40% gains in the world's largest offshore drilling contractor. Here's a hint: this oil stock is not a refiner. Once you find the oil you have to drill down and get it out of the ground and that's where this Blue Chip Growth company comes into the picture. They have 140 offshore drilling units and 8 of the new ultra-deepwater rigs being built. In the last three years, earnings have tripled and as the search for oil continues unabated.

Using fundamental and quantitative stock screening research, my analysts and I have identified the best ways to profit from oil's record rise: from a pure refiner, to a drill-operator to a company that transports the oil from its underwater home to land-based drill servicers. All of these companies are featured on my Blue Chip Growth Buy List, and each should prosper as the worldwide search for new sources of oil not only continues but also accelerates. To learn more about these stocks, try a risk-free trial of Blue Chip Growth today!

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