During the California Gold Rush in the late 1840's, Sam Brannan, a local merchant, became the richest man in California. Brannan never struck gold. Why dig for the elusive yellow metal when everyone else needs tools? Sam Brannan became the richest man in California by selling shovels in a gold rush. Today's gold rush is of an entirely different kind. Companies are rushing to extract enough fossil fuels to satisfy the world's intense demand for energy. Drilling for oil and natural gas has spread across the globe as resources become less available and more valuable. Newer technologies have vastly expanded the areas in which resources can be extracted. Hydraulic fracturing, or "fracking", has turned the United States into a potential global energy supplier. Like Sam Brannan, OilStatesInternational doesn't dig or drill (although as part of their services, they will do the drilling for you). Instead, the company supplies the needs of exploration companies and their employees. Oil States International supplies tools, tubing, bearings and drilling services to oil and gas drillers around the world. Their largest source of revenue comes from the accommodations business. In this segment, Oil States International provides rooms, laundry and food services to oil and gas employees. Employees often stay for extended periods of time at the site of the drilling activity. All of those people need a place to stay. As of the year ending 2011, Oil States International had more than 17,000 rooms. The company looks to expand its room count in Australia, Canada, and the United States. Oil States International operates in four segments; accommodations, offshore products, well site services, and tubular services. Accommodations accounts for about 50% of Oil States revenue. Like the company as a whole, the offshore products segment recorded record revenue last year and ended 2011 with a $535 million backlog, also a record. The stock has traded in a wide range over the last 52 weeks, from a low of $44.77 to a high of $87.65. Shares currently trade at $74.73 and are down about 3% year-to-date. This appears to be an attractive entry point for long-term investors. Oil States trades at less than 13 times earnings and only about 9 times 2013 projections. For perspective, the S&P 500 index trades at just under 17 times earnings and the S&P 400 mid-cap index at more than 22 times earnings. Oil States has a price-to-earnings growth (PEG) ratio of just 0.47. Oil States International has grown earnings at an annualized rate of 8.5% over the last five years and cash flow at an annualized rate of 15.2%. Some investors may be concerned about the company's spend rate. Oil States is in a major expansion mode as drilling activity increases exponentially. Oil States has a large amount of debt for a company its size. If the oil and gas industry weren't growing so fast, I would be concerned about Oil State's spending. As it stands, Oil States must continue expanding, especially in its accommodations business, to keep up. As long as there isn't a major reduction in the search for energy sources, Oil States can continue to invest and grow. Though natural gas prices are at decade lows, many companies are turning to oil and natural gas liquids, which they can still profitably produce. Oil States is in a position to convert right alongside them, even if it means moving their mobile camps to different locations. With the stock well off its 52-week high, shares look attractive. The company has reported upside earnings surprises every year since 2008. With a huge opportunity in its fast growing accommodations business, I would expect this trend to continue. Investors should remember the story of Sam Brannan, and consider a company that is "selling shovels in a gold rush".

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