National Oilwell Varco, Inc.
Thesis
National Oilwell Varco has a very strong market position and about $12 billion of backlog and net cash on the balance sheet. Despite challenging short-term fundamentals due to the price of oil dropping, the company is well-positioned to emerge stronger from this crisis and has the potential to improve its position in its core segments.
Did it work?
The thesis is a qualitative long case predicated on NOV 'emerging stronger' from an oil price downturn, backed by its backlog and net cash position. With no price performance data and an unknown elapsed time, there is no way to verify whether the recovery played out or whether the company actually improved its competitive position in its core segments. The stated balance-sheet facts were conditions at pitch time, not outcomes, so the verdict must remain open.