Last month’s buy-signal on energy-services company Allis-Chalmers (ALY: NYSE) at the $5 per share level was immediately followed by a substantial price-surge above $6 in just 3 trading days. Yet, with the floodgates wide open on a deteriorating U.S. economy – ALY shares have since retreated, along with the broader markets, to current levels around the $3.60 range.  

While the global economic downturn and weak crude pricing will no doubt take a bite out of the earnings picture for U.S. oil-services companies in 2009, I see Allis-Chalmers as well-positioned to deliver positive shareholder value going forward as a result of the company’s differentiated services, its presence in virtually every key U.S. oil and gas region, and its projected growth in the international energy markets.

If you purchased shares of Allis-Chalmers (ALY: NYSE) at the $5 range following my December buy-signal, my recommendation is to buy additional ALY shares on market dips over the next few weeks. This will dramatically lower your average cost-per-share basis. Similarly, if you do not yet own Allis-Chalmers – these next few weeks should provide ample buying opportunities on ALY shares at the low to mid-$3 range.  

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