Acergy S.A. - ADR (ACGY)

London-based Acergy, previously known as Stolt Offshore S.A. (SOSA), is a leading oilfield contractor engaged in the designing, procurement, building, installation, and servicing of a range of offshore surface and sub-surface equipment for the oil and gas industry. We are upgrading Acergy S.A. ADRs to Buy from Hold following the stock's roughly 50% pullback since July.

We believe that the recent weakness has made valuation very compelling for this leading oilfield contractor. Acergy has been successfully pursing a strategic shift towards the deepwater markets, enjoying a leading market position with strong growth prospects across all of its regions. Acergy's growing backlog, which now stands at $3.6 billion, offers strong long-term earnings and cash flow visibility.

Last year's successful completion of the challenging and technically complex Greater Plutonio project (the company's single-largest project to date) offshore Angola demonstrated the company's capabilities in deepwater engineering and construction. Acergy remains well positioned to capitalize on the positive outlook for subsea engineering and construction services demand over the coming years.