Companies whose operations rely on the price of commodities are tough to get a handle on. Revenues vary with the price of the commodity, operating leverage tends to be large — meaning big swings in profitability at¬†differing revenue levels — and getting the timing right for future commodity price swings is a task that makes fools of all who try.

We have¬†written about NOV in Forbes and published a long-form report on NOV’s demand environment, and today we finally published an IOI Tear Sheet on the company.

Long story short, NOV has a great deal of valuation uncertainty and this is reflected in both the width of the valuation range and also the spread on the BSM cone. This would be a very dicey investment for someone whose only tool was stocks and bonds, but it is an investable idea thanks to the flexibility of options. Take a look at our Tear Sheet for the details!

Also, we are planning to hold a conference call regarding our research in NOV, so please check back for details.

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