Seeking Alpha: At Basic Energy Services, Sentiment Has Changed Faster Than The Business

A sector-wide re-rating can be a powerful driver for a stock, and so it has been for Basic Energy Services (BAS). Amidst an improving outlook (or at least perceived outlook) for energy service stocks, Basic Energy has been one of the strongest names - handily beating Schlumberger (SLB) and Halliburton (HAL) so far this year, as well as most other small/mid-cap service names like Key (KEG), Superior (SPN), RPC (RES), and C & J Energy Services (CJES).

While I thought that Basic Energy had been overlooked back in 2013, it's hard to make the same argument now that sector-wide forward EV/EBITDA multiples have moved from 5x to 6x to 7x to 8x. Basic Energy is likely to see good improvements in its core Permian market in 2014, and those improvements are going to be an important part of the remaining upside in these shares as sentiment has already improved markedly.

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At Basic Energy Services, Sentiment Has Changed Faster Than The Business