Parker Drilling (PKD)
has been a public company for quite some time, but the company hasn't
had what you'd call a consistent record of performance. Energy services,
and drilling particular, has always been a volatile, cyclical business,
but I would estimate that the company has only earned its cost of
capital once or twice over the last decade. Maybe it's not altogether
surprising then that the stock has stayed pretty much stuck in a band
between $4 and $6 over the past four years.
These shares dipped
slightly below that range in April of this year, only to exceed it
slightly in July and here again more recently, but I believe these
shares may yet be undervalued. Demand for drilling barges in the Gulf of
Mexico has picked up, and so too has demand for rental tools
(particularly for deepwater activities). At the same time, I think the
company's progress with its international operations still has not been
fully appreciated by the Street. Although Parker Drilling remains a
"show me" story, I wouldn't be surprised if these shares trade between
$8 and $9 before too much longer.
Please read the full article here:
There's Still Room For Parker Drilling To Outperform
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