LUFK

Our Reports on Stocks in the Energy Equipment & Services Industry

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Image Source: Sollven Melindo Structure of the Energy Equipment Industry The energy equipment industry is heavily tied to the exploration and production (upstream) expenditures of oil and gas producers across the globe. Many industry constituents participate in a number of different market segments to offer a complete range of products/services to customers. The fortunes of the group are levered to energy prices (crude/natural gas), as higher prices make drilling projects more attractive and increase the demand for oilfield equipment and services. However, falling prices have an opposite effect, creating long boom and bust cycles. We’re neutral on the structure of the group. We’ve reallocated our resources to optimize our energy coverage. See here.

ETF Analysis: Energy

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Charting Cash Flow and Net Debt — The Oil Majors

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Traditional free cash flow generation has been strong for the oil majors through the first nine months of the year, but their balance sheets remain bloated with net debt. A few haven’t covered their cash dividends with free cash flow generation through the first nine months of 2017. Oil & Gas – Major: BP, COP, CVX, PTR, RDS, TOT, XOM

GE Pays Up For Fracking Exposure

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Earlier this morning, The Wall Street Journal reported that GE (click ticker for report: ) will acquire oil pump manufacturer Lufkin Industries (click ticker for report: ) for a whopping $3.3 billion, or $88.50 per share in cash. Paramount to any acquisition is the price paid, and we think GE paid a hefty sum to gain exposure to the US hydraulic fracturing market, paying a 20% premium to the high-end of our fair value range and a price 38% higher than Lufkin’s closing price on Friday. We understand the attractiveness of the energy business, as well as the potential synergies from incorporating the business into GE’s existing portfolio, but paying over 25x 2013 earnings for a firm that hasn’t generated … Read more

Valuentum’s Comprehensive Outlook for Crude Oil and Natural Gas Prices

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Let’s take a deep dive into the energy sector. The best dividend growth ideas, the most likely takeout candidates and more…