Questor's Garry White tips Oil Services as his medium term investment sector of choice
By Chris Stone
While current FTSE valuations make him nervous, Questor Editor Garry White remains keen on one interesting sector: Oil Services.
"We have not run out of oil," Garry states, referencing previous market concerns over peak oil. "We've proved... that there is plenty of oil left in the world."
In which case, why not invest in oil companies? According to Garry, the chief problem is that most of the oil is owned by national oil companies who don't have the neccessary skills base to extract the oil efficiently. Enter Oil Services - a sector presented with a unique opportunity for expansion.
One company in particular has been underperforming so far this year: Petrofac, who's Algerian oil plant construction was delayed due to terrorist activity in January.
"The company has maintained it's target of doubling earnings per share between 2010 and 2015. That hasn't changed," says Garry, who particularly likes Petrofac's Integrated Energy Services company, led by Andy Inglis, formerly of BP. "The shares have fallen 15pc this year, against the market and therefore I think they're a particularly interesting play for a medium term investor."