We're continuing our review of oil and gas services stocks today.
Yesterday I wrote, "Long term investors should remain bullish on oil and natural gas investments, regardless of the short-term implications of what's going on in Libya right now...I'll discuss two companies with proven track records in the oil services sector that are a good value. Without any clear alternative to oil for decades to come, oil services companies should also prosper since they help bring the black gold to market."
In An Oil and Gas Services Company with the Right Stuff yesterday I discussed Carbo Ceramics (NYSE: CRR), a company that specializes in the horizontal drilling used to bring oil and gas deposits out of shale.
Today we'll look at Helix Energy Solutions Group (NYSE: HLX), a contracting company that provides services to offshore energy companies. Helix Energy Solutions Group isn't a dividend payer like Carbo Ceramics, but it's attractive for an entirely different reason - its services should help get America's deepwater drilling in the Gulf of Mexico back on track following the 2010 oil spill by BP (NYSE: BP).
The stock, which routinely traded pre-recession between $35 and $45, has risen this year by 38 percent, handily out-performing the Dow Jones U.S. Oil Equipment & Services Index.
Yesterday I wrote, "Long term investors should remain bullish on oil and natural gas investments, regardless of the short-term implications of what's going on in Libya right now...I'll discuss two companies with proven track records in the oil services sector that are a good value. Without any clear alternative to oil for decades to come, oil services companies should also prosper since they help bring the black gold to market."
In An Oil and Gas Services Company with the Right Stuff yesterday I discussed Carbo Ceramics (NYSE: CRR), a company that specializes in the horizontal drilling used to bring oil and gas deposits out of shale.
Today we'll look at Helix Energy Solutions Group (NYSE: HLX), a contracting company that provides services to offshore energy companies. Helix Energy Solutions Group isn't a dividend payer like Carbo Ceramics, but it's attractive for an entirely different reason - its services should help get America's deepwater drilling in the Gulf of Mexico back on track following the 2010 oil spill by BP (NYSE: BP).
The stock, which routinely traded pre-recession between $35 and $45, has risen this year by 38 percent, handily out-performing the Dow Jones U.S. Oil Equipment & Services Index.
The stock (and for that matter, the entire index) was dramatically hit in the summer of 2010, so Helix's performance since the beginning of 2010 is only in line with the broader oil services index. I believe the recent outperformance will continue however, so would recommend adding Helix to your watch list now.
Helix is a deepwater contractor and owns the robotics needed for offshore drilling, wellhead installation and maintenance. It can also lay the pipes in trenches on the ocean floor, and has oil and gas exploration and well development operations.
The company gained attention when its Fast Response System helped contain oil leaking from the damaged BP well. Now the Helix Well Containment Group has signed up 22 deepwater oil and gas operators to cooperate on fast-response measures in the event of another spill. That has led the U.S. government to start issuing drilling permits again.
Helix Energy has been profitable in three of the last five years as it restructured debt and streamlined operations - which also placed a sharper focus on environmental services. The company has a market cap of $1.8 billion,
While Helix posted a loss of $1.22 per diluted share (due to charges) in 2010, it reported a $101.1 million profit in 2009. Analysts surveyed by Thomson Reuters weren't dissuaded by the loss in 2010, and six of the seven following the stock still rate it a buy or strong buy. The company is expected to return to profitability in 2011, and predictions call for earnings to double in 2012.
As I noted, Helix Energy's shares used to trade in the $35 to $45 range. While it might be a while before the stock reaches those levels again from its current price around $16 (that would be a 100 percent plus gain), Helix Energy has the tools necessary to keep oil and gas flowing from the Gulf of Mexico and other regions. That capability should help to unlock the significant upside potential of the stock.
The search for oil and natural gas will continue, both onshore and offshore. Both Helix Energy Solutions, and the company I featured yesterday, Carbo Ceramics are two ways you can invest in the trend. As always, please do your own research to make sure investments fit your particular criteria.
While Helix posted a loss of $1.22 per diluted share (due to charges) in 2010, it reported a $101.1 million profit in 2009. Analysts surveyed by Thomson Reuters weren't dissuaded by the loss in 2010, and six of the seven following the stock still rate it a buy or strong buy. The company is expected to return to profitability in 2011, and predictions call for earnings to double in 2012.
As I noted, Helix Energy's shares used to trade in the $35 to $45 range. While it might be a while before the stock reaches those levels again from its current price around $16 (that would be a 100 percent plus gain), Helix Energy has the tools necessary to keep oil and gas flowing from the Gulf of Mexico and other regions. That capability should help to unlock the significant upside potential of the stock.
The search for oil and natural gas will continue, both onshore and offshore. Both Helix Energy Solutions, and the company I featured yesterday, Carbo Ceramics are two ways you can invest in the trend. As always, please do your own research to make sure investments fit your particular criteria.
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