David Sterman

Thanks to a dome of cool air that is enveloping much of the eastern United States, natural gas prices are back in freefall, falling roughly $1 per thousand cubic feet (Mcf) since just the start of May to a recent $3.36 per Mcf. Meanwhile, oil prices have been on a tear, rising more than $10 a barrel in that time to a recent $108 a barrel for West Texas Intermediate crude.

For companies that produce a considerable amount of both oil and gas, it's hard to know if the good (oil) outweighs the bad (gas). Yet insiders at certain energy companies have no such confusion. They are aggressively buying company stock while share prices meander. Perhaps their bullishness stems from the fact that their companies aren't really dependent on energy prices and instead are focused on providing services and equipment to the industry.

1. Nabors Industries (NYSE: NBR)

Make no mistake, many energy insiders long for the good old days of 2007 and 2008, when triple-digit oil prices fueled a vigorous amount of capital spending on both energy exploration and drilling equipment. Nabors, which leases more than 500 drilling rigs (mostly onshore), was a clear beneficiary back then, as shares traded for around $35 five years ago. That was a reasonable price to pay for a company that earned more than $2.50 a share in both 2006 and 2007.

But a subsequent plunge in oil prices led to a drop in demand for Nabors' gear, and per-share profits are likely to slip below $1 this year. Shares now trade for less than half as much as they did five years ago. Analysts at Goldman Sachs think it's time to anticipate better days ahead, "with management confirming that (this year's second quarter) should mark the bottom for earnings."

To be sure, Goldman Sachs' analysts are generally bearish on drilling equipment providers, and have a "sell" rating on rival Patterson-UTI (Nasdaq: PTEN), for example. They are concerned that drilling budgets may dry up well before year's end, leading to lowered forecasts. Yet Nabors appears to be well insulated from a possible looming slowdown, thanks to heavy investments in new rigs that are among the industry's most efficient.

David Sterman

David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com