How should investors navigate the choppy offshore sector in 2015?

Cling to companies with strong balance sheets.

Offshore and marine stocks were mercilessly battered this year as oil prices plunged to unprecedented lows. But certain rewards await investors who brave enough to foray into suffering sector.

According to OCBC, the offshore sector has strong long-term fundamentals as countries have an interest in fulfilling as much domestic demand as possible in order to boost energy security.

“But equity investors are generally a jittery lot, and stepping into 2015, we would favour companies with strong balance sheets to weather any downturns. Those with exposure to higher quality clientele (e.g. direct dealings with end users such as national oil companies, and established operators instead of speculators) and a significant outstanding order book should also be more resilient. As such, investors keen to have an exposure to this sector may want to consider Keppel Corporation and Ezion Holdings,” noted OCBC.
 

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