McDermott International Inc. (MCDIF)

[jugs]

MDR and HLX share some common turf. HLX has climbed beautifully while its sister company seems to have been floundering for some time now. I profited nicely when selling but apparently missed out on a lot more if only I'd held it a week longer.

I never built a large position in HLX in contrast to MDR where I'd held more than ten thousand shares until doing some profitable trading of late. I continue to hold about 7,300 shares, having added some a week or so ago. I fully expect to add to the position.

Now, here we are with HLX dramatically outperforming MDR in terms of fetching a desirable share price. So what gives?

I have no concrete answer although I'd stake my life on this:

MDR will soon rebalance and gain significant ground. It's been solidifying its trading range for a long time. As energy shows signs of reclaiming some of its glory-days loftier valuation, I expect to find MDR moving in synch with the sector. Meanwhile, drillers are under tremendous pressure right now and it will take some meaningfully impactful news to propel us upwards soon. MDR's contract, both new and not so new---these are with very solid partners, usually natco's (national oil companies operated by independent countries as opposed to less stable businesses).

So, as I said, I'm in buying mode. I'm unwilling to pay more than $5 and, given that it's highly unlikely we'll cross over into the $6/share range before first dropping back to $4.75, I'm thinking I should be able to pick up some MDR at sub-$5. My cost basis is currently at $4.72 and I refuse to let it rise much if at all.