When I was thinking about writing up Basic Energy Services (BAS)
for Seeking Alpha, I was surprised to see how little coverage there has
been on the name on this platform. Sure, this is not a large energy
services company (with a market cap around $500 million and an
enterprise value around $1.3 billion), but it is the third-largest
company in the well servicing industry and this is a business that could
do substantially better when (or if?) demand and pricing improve in
major basins like the Permian.
It's looking like 2013 is going to
finish on a fairly sour note, as competition among service firms
continues to keep a lid on prices and profits. The next year should be
better, though, and even at relatively modest EBITDA multiples this
stock looks undervalued. While I still presently prefer to own Cameron (CAM) and Weatherford (WFT), it's not by a wide margin and Basic would be high on my list if I wanted to go more overweight towards service companies.
Please continue here:
Basic Energy Services Looks Too Cheap
No comments:
Post a Comment