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by Joseph Lazzaro
Cameron International’s (CAM) shares, first discussed here on April 24, 2009 at a price of $25.59, are on the move again.

Oil/natural gas servicer Cameron should benefit from the Obama’s administration likely, revised blowout preventer safety rules, as oil companies conform to the new standards.

Further, new technology that’s likely to increase natural gas drilling and production (via a technology called hydraulic fracturing) in North America also holds out the promise of increased valve business for CAM. And Cameron’s purchase of Natco Group, an energy capital equipment company, will increase international business.The First Call FY2010/FY2011 EPS estimates for CAM are $2.39 to $2.73. Each EPS estimate looks about 5% low, according to my analysis.

Technically, Cameron put its summer swoon in the rear-view mirror this fall, rising to about $49 from $31. There will be key, psychological resistance at $50, but the calculation here argues the uptrend is strong and should prevail.

2011 Outlook: I view Cameron as a long-term play, but if you’re looking to sell CAM within the year, it’s probably best to take your profits after it rises to $53-55, if it fails to rise above $56.

Stock Analysis: I consider Cameron International to be a moderate-risk stock. If an investor has already purchased the company’s shares, I’d hold them. If not, I’d consider buying a 25% position in CAM now; then buy another 25% in one month, if U.S. and global economic conditions don’t worsen substantially. Under any circumstance, I wouldn’t buy more than 50% of my CAM position before February 2011 and I’d put a sell/stop loss at: $26.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Happy trading,

Curt