I liked Parker Drilling (PKD) and its turnaround/self-improvement story
about six months ago, and while the idea worked pretty well for a short
time (the stock rose about 30% in the first month after that article),
performance has trailed off noticeably since March as the company warned
that 2014 would be off to a slower start. With that, the shares have
been left behind by other small-cap energy service providers and
contract drillers.
The sluggish start to 2014 is disappointing,
but the Parker Drilling story is still worth a closer look. The company
is the leading player in domestic drilling barges, earning a dayrate
premium for the quality and capabilities of its rigs. The company's
international land rig business is seeing better utilization, and there
is a significant opportunity in the tool rental business from expanding
operations in the Gulf of Mexico (or GOM) and improved margins in the
international business (or ITS). A fair value of around $8 may not
scream "must own" today, but it is worth a look as a relative laggard in
the space.
Follow this link for more:
Parker Drilling Starting Slow, But On A Better Path
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