Stockchase Opinions

David Dietze Weatherford International Inc. WFT-N WEAK BUY Apr 27, 2018

He is positive over the next 18 months, but you have to be confident in the energy sector. After years of disinvestment in the sector and as oil prices creep higher, he thinks this company will benefit.

$2.950

Stock price when the opinion was issued

oil gas field services
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A great name in its space.
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An equipment/services company. An international play. Have very strong growth (40%) in the eastern hemisphere next year. All their peers are down grading earnings estimated, they aren’t. Good company in a difficult environment.
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A mobile energy services companies. These often trade with a low earnings multiple because of cyclicality. We are in a significant leg higher in energy and by the time it is over it'll trade like a growth stock and the market will be willing to pay much higher earnings multiple. Eastern Hemisphere business grew at 48% and Latin America/South America grew at 28%. North America grew at 11%.
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Has a lot of market share in oil/gas equipment. Has a history with them and is less than pleased with the way management led investors to believe certain things and ultimately disappointing. There are better ones to focus on.
DON'T BUY

Historically oil service stocks do very well from January right through until this time of year. However, this one has not been doing that and has been underperforming the sector as well as the market. Also, probably below its 20 day moving average. There are probably better ones available.

WATCH

The markets should consolidate for the next couple of months. He does not think the US housing market is as strong as people think. He would nibble against the 200 day average over the summer in the mid-$70s.

COMMENT

In his core portfolio, he got rid of the last little bit of his energy sector. The chart shows a little bit of a new uptrend happening. It hasn’t broken the downtrend. There is potential for it to break out above its downward line, and that would be quite bullish. If it got above $6, that would really change it. Risk/reward looks pretty good. It will probably come back to revisit its floor, and if it breaks down through that, you probably want to get out. The seasonal period of energy normally is right about now.