BP spill won’t hurt these service stocks

Article Excerpt

In response to the BP oil spill in the Gulf of Mexico, the Obama administration has banned some offshore operations in the region. The ban, which is being challenged in court, affects oil and gas companies and firms that operate, service and supply drilling rigs. To cut your risk, we recommend focusing on service companies that mainly operate onshore, like Pason Systems and Pulse Seismic. PASON SYSTEMS $11.06 (Toronto symbol PSI; SI Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 81.5 million; Market cap: $901.4 million; Dividend yield: 2.9%) rents equipment that its customers use to monitor and manage land-based oil rigs. It also sells communications systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. The company serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended March 31, 2010, Pason’s revenue rose 4.1%, to $56.4 million from $54.2 million a year earlier. Cash flow…