Drilling deeper for an oil play: Seadrill (SDRL)

Drilling Deeper to Find an Oil Play

by Bill Gunderson
The Street.com

NEW YORK (TheStreet) -- Recently, the stock market has become less desirable very quickly. Over time I have found that weakness in the market can come on the scene rather fast in a fashion similar to the Indianapolis 500.

Now let's shift to the S&P 500. We have been zooming along at about 200 mph for the past several months, and every week I have been reporting in my newsletter the domesticstock market, small and mid-cap stocks, and biotech, pharmaceutical and the technology sectors are leading the way.

Well, all of a sudden, three things crept up on us: the debt ceiling, taper talk and Syria. They are all big threats, but Syria could be the most dangerous one.

It may lead to nothing and all blow over, but this is definitely not a time to have your foot on the accelerator because there seems to be a muffler on the track of the S&P 500 once again!

That being said, there are also new opportunities arising. On days when the market is down, I handle the day just as I do any other day. I look at my holdings one at a time. Most are holding up just fine despite the new worries. Others are not and those are the ones I want to shed.

Currently, I have had a pretty good-sized position in an income/dividend stock that is oil-related, which seems like a good place to me to be right now considering the troubles going on in the Middle East. In fact, I added to my position recently, which was good timing because the stock continues to hit new highs.

This is a stock that I own in my growth and income accounts. I do not have people invested right now in bonds or Real Estate Investment Trusts earning those dividends and coupon rates. Why? Because bonds and REIT's are interest rate-sensitive and interest rates are going up. Instead, I have an eclectic mix of stocks that pay dividends and also, in my opinion, have the potential for capital appreciation going forward.

One such stock is headquartered in Bermuda -- Seadrill (SDRL_), $21 billion large-cap stock that currently sports a dividend yield of 7.7%. But I am not chasing a dividend here -- that is never a good idea -- and I require more from a stock than that it is simply from an area of the market that should do well given the current conditions in the world. SDRL has the other three characteristics that I like.

Continue reading at: Drilling Deeper to Find an Oil Play - TheStreet

SDRL Chart

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Bill Gunderson

Bill Gunderson

Bill Gunderson is a wealth manager, syndicated financial talk show host, and author of the Best Stocks Now -- one of the top 10 best selling financial aps in the world.

He is a frequent guest on local and national media, including CNBC, Fox Business, Fox News, Bloomberg, Barron's, Forbes, and others.

His wealth management business caters to high net worth individuals clients all over the world. He would be happy to look at your portfolio.

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