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TWST: Justin, what are the important areas to focus on, in your analysis?

Mr. Tugman: Well, I agree strongly with Robin in the fact that you want to look at the cycle. What we do is break it down, try to determine where a stock fits. For example, is the company an early cycle, mid-cycle or a later cycle play? Knowing where a company falls in the cycle will help determine what valuation we’ll put on the earnings for the forward years. When you look at these stocks versus other members of the energy industry, whether the major integrateds or E&P companies, oil services stocks are much more richly valued, and it’s because they lag the earnings momentum of the E&P companies. And that’s strictly due to the fact that these companies are tied mostly to the capital spending of the majors and E&P companies. In coming out of the trough, the E&P companies and the major integrateds were the first to benefit from higher commodity prices, and there was a trickle-own effect as to when it began to enter into the income statements of the oil services companies. So oil services companies will lag in terms of earnings, and therefore will have the higher valuations at this point.

TWST: Justin, where do investors go from here? Is this a time to buy any of these stocks?

Mr. Tugman: When you look at the marketplace right now, we would be purchasing some of these stocks, but you have to be selective here. Number one, we believe that in this market environment you want to stay in large cap, liquid names. An investor, especially on the institutional side, has to look at liquidity and, therefore, I think you can essentially eliminate all your small caps and a fair amount of your mid-cap companies. Investors have to be nimble in this environment. We’ve seen a significant pullback in the US stock market including most of the stocks in our sector, and we think it’s a pretty good opportunity for investors to put new money to work in some of these names. We believe the fundamentals now and going forward are tremendous. There are going to be very few places in the market where you’re going to see earnings growth like you’re going to see in this industry. The fundamentals, not just of this industry, but of the overall energy complex, are very, very positive, and in the end, those strong fundamentals will outshine any negatives that the market might be concerned about right now.

TWST: Which large cap names should investors put money in, and why?

Mr. Tugman: I like Schlumberger (NYSE:SLB) below $60. There are a couple of other names, maybe not on the large cap side, but I think that they are large enough, and liquid enough, that people could trade them. I like Cooper Cameron (NYSE:CAM) here in the low $50s. The stock has been somewhat of a disappointment, because of the either perceived or real delays in the awarding of subsea equipment, and also deepwater projects, but some of Cooper Cameron's competitors are starting to fill up their pipelines and backlogs. Going forward, the fundamentals of Cooper Cameron are very attractive, especially when you look at today's price. If an investor is a true believer in this cycle and the vision of deep water becomes a reality, an investor should be in Cooper Cameron.