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7 Deceiving Energy Equipment Stocks With Poor Fundamentals

Recent gains belie shoddy stocks

   

You would think that after a month of not getting any love, I’d change my mind about at least some of the energy equipment stocks I gave poor grades to back in February. However, although I do have two new stocks on this list, love is not as fickle as some make it out to be. For the majority of last month’s picks, I cannot deny their poor fundamentals, despite the suggestive winks they toss my way.

Of the 5,000 publicly traded companies I research with my Portfolio Grader tool, I’ve come across these seven energy equipment stocks whose fundamental and quantitative measures have not impressed me enough to place them on a buy list.  Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”

Baker Hughes (NYSE:BHI) supplies oilfield services, products, technology and systems to oil and gas companies. In the last year, BHI stock has dipped 27%, despite modest YTD gain of about 3% and a gain of 7% for the Dow Jones. BHI stock gets a “D” for earnings momentum, a “D” for its ability to exceed the consensus earnings estimates on Wall Street and a “D” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of BHI stock.

McDermott International (NYSE:MDR) is an engineering, procurement, construction and installation company. Since last February, MDR has posted a significant loss of 41%. Despite a sizable gain of 14% for the year, MDR stock gets a “D” for operating margin growth, an “F” for earnings growth, a “D” for earnings momentum and an “F” for its ability to exceed the consensus earnings estimates on Wall Street in my Portfolio Grader tool. For more information, view my complete analysis of MDR stock.

Patterson-UTI Energy (NASDAQ:PTEN) owns fleets of land-based drilling rigs in the U.S. PTEN stock has dipped 27% in the last 12 months. PTEN stock gets a “D” for earnings momentum, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, a “D” for the magnitude in which earnings projections have increased over the past month and a “D” for cash flow in my Portfolio Grader tool. For more information, view my complete analysis of PTEN stock.

Rowan Companies (NYSE:RDC) deals with contract drilling services and has watched its stock value dip nearly 12% since last year. Although RDC has gained a sizable 21% this year, the stock gets a “D” for sales growth, a “D” for operating margin growth, a “D” for earnings growth, a “D” for earnings momentum, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month, an “F” for cash flow and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of RDC stock.

Schlumberger (NYSE:SLB) works with companies in the oil and gas company and provides technology, integrated project management and information solutions. Since last February, SLB stock has slid nearly 15%, compared to gains by the broader markets. SLB may have gained some momentum this year with a gain of 14% YTD, but fundamentally, the stock gets a “D” for operating margin growth and a “D” for the magnitude in which earnings projections have increased over the past month in my Portfolio Grader tool. For more information, view my complete analysis of SLB stock.

Transocean (NYSE:RIG) is another offshore contract drilling services on this list. RIG stock has dropped 35% since this time last year. Despite a healthy 38% gain YTD, RIG stock still makes me uneasy. Here’s why: RIG stock gets a “D” for sales growth, an “F” for operating margin growth, an “F” for earnings growth, a “D” for earnings momentum, an “F” for its ability to exceed the consensus earnings estimates on Wall Street, an “F” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and an “F” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of RIG stock.

Weatherford International (NYSE:WFT) produces equipment that is used for the drilling, evaluation, completion, production and intervention of oil and natural gas wells. WFT rounds out the list with a yearly loss of 31%. With a 9% gain YTD, you’d think this stock would be sound. But, based on my research, I’m not feeling the music. WFT stock gets a “D” for its ability to exceed the consensus earnings estimates on Wall Street, a “D” for the magnitude in which earnings projections have increased over the past month, a “D” for cash flow and a “D” for return on equity in my Portfolio Grader tool. For more information, view my complete analysis of WFT stock.

Get more analysis of these picks and other publicly traded stocks with Louis Navellier’s Portfolio Grader tool, a 100% free stock rating tool that measures both quantitative buying pressure and eight fundamental factors.


Article printed from InvestorPlace Media, http://investorplace.com/2012/02/7-deceiving-energy-equipment-stocks-with-poor-fundamentals-bhi-mdr-pten-rdc-slb-rig/.

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