Monday, February 9, 2015

Seeking Alpha: Has All The Bad News Been Baked Into RPC's Price?

Superior quality can help a company through hard times, and energy services provider RPC (NYSE:RES) has held up better than companies like Basic Energy (NYSE:BAS), Key Energy (NYSE:KEG), and C&J Energy Services (NYSE:CJES), but a 40% drop in six months is still harsh. What's more, I think it's anybody's guess as to whether estimates have gone low enough to accurately reflect this downturn in the cycle - even RPC's management doesn't believe it has much visibility as to the depth or duration of the downturn.

I expect that RPC will emerge from this downturn in good condition and maintain its reputation as one of the highest-quality small cap service providers. While RPC shares should do better if/when the market believes it has overcorrected (and/or if the company's Permian-centric pressure pumping business holds up better than expected), but I don't expect RPC to offer the same sort of leverage to improving sentiment as Basic Energy or Key Energy would. On the other hand, I am confident in RPC's ability to withstand a prolonged downturn while its more debt-laden peers may not.

Continue here for the full article:
Has All The Bad News Been Baked Into RPC's Price?

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