Picking through a Bumper Crop of Oil-Field Service IPOs
The recent bumper crop of oil-field service IPOs includes a number of commoditized businesses seeking to strike while the iron is hot and a few niche plays that could be worth a look.
Focus On The Permania
The latest additions to the Energy & Income Advisor Focus List have lagged of late, primarily because of the selloff in West Texas Intermediate crude oil. In light of these recent market moves, we we revisit our outlook and investment strategy.
Beyond The Big Four
The bullish case for US oil-field services hinges on accelerating drilling and completion activity helping to relieve the capacity overhang built up during the boom years, potentially setting the stage for a recovery in pricing.
Industry survivors with superior scale and balance sheets have an opportunity to take market share from smaller operators. Oil-field service companies have also slashed costs aggressively, providing earnings leverage to a recovery in volumes.
At the same time, investors must remember that many of these companies operate cyclical businesses and consider the extent to which current valuations have priced in any incremental upside in earnings.
Schlumberger vs Halliburton
We delve into fourth-quarter results and management commentaries from oil-field-service giants Schlumberger and Halliburton to form a complete picture of the trends playing out in North America and international markets.
Quarterly Check-Up
A number of our Model Portfolio holdings have reported third-quarter results. We look at how they fared and analyze their future growth prospects.
Schlumberger and Halliburton Call the Bottom: Now What?
Schlumberger and Halliburton’s management teams called a bottom in the North American oil-field services market, but the timing, pace and magnitude of the recovery may disappoint investors.
Oil-Field Services and Equipment: Exercise Caution
Despite the recent rally in shares of oil-field service providers, our negative outlook for activity levels in the international market and skepticism regarding the timing and magnitude of a recovery in North America explains why we remain underweight oil-field services and capital equipment. Many of these stocks have rallied too far, too fast and don’t account for overcapacity that remains to be worked off from the boom years.
The View from the Oil-Field Services Industry
Schlumberger’s wide-ranging earnings calls have long provided investors with useful insights into bigger-picture trends and developments affecting the energy value chain, thanks to the firm’s forthright management team and the breadth of its oil-field service offerings. In these uncertain times, investors should heed CEO Paal Kibsgaard comments on the supply-demand balance in global oil markets and the various forces pushing and pulling crude prices.
Coal Still King Despite Would-Be Usurpers
Imagine a future where US coal-fired power plants continue to generate reliable baseload power, while CO2 collected during their operation fuels the shale oil boom.
Schlumberger Still at the Head of the Class
Schlumberger’s first-quarter results and conference call demonstrates once again why the firm is the creme de la creme of the oil-field services industry and highlighted several investable opportunities. Meanwhile, Weatherford International continues to help itself to price appreciation.
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Live Chat with
Elliott and Roger on Aug. 29, 2017
Portfolios & Ratings
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Balanced portfolios of energy stocks for aggressive and conservative investors.
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Experts
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Peter Staas
Managing Editor: Capitalist Times and Energy & Income Advisor