Wednesday, April 9, 2014

Seeking Alpha: Parker Drilling Starting Slow, But On A Better Path

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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