Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Picks and Shovels for the Energy Patch

By

You know the story. It wasn't the gold miners that made the big money; it was the people that sold them picks and shovels, and that's the role of this company in the dynamic global energy exploration and production sector.

PrintPRINT
Investors may also be turned off by key operational risk factors inherent in its businesses, such as weather-related disruptions and commodity price fluctuations (which impact production activity by customers and demand for TTI's products and services).

We recognize that the unpredictable nature of these risk factors is an ongoing concern. However, the company has made several key acquisitions that should help minimize the expected underperformance in its Offshore Services segment and result in accelerated earnings growth in the year ahead.

Last March, TTI acquired Optima Solutions, a provider of rig cooling services and associated products that suppress heat generated by high-rate flaring during well test operations. Based in Scotland, Optima enables TTI's Production Testing segment to provide customers with a broader range of testing services, and expands its presence in many significant global markets.

With the acquisitions of Eastern Reservoir Services (ERS) from Patterson-UTI Energy in April and Greywolf Production Systems in July, the company expanded its well testing and after-frac flow back operations to serve oil and gas operators in the Appalachian basins, the Rocky Mountains (including the Niobrara Shale formation), the Williston Basin located in the Midwest, and western Canada.

Not only do these acquisitions expand TTI's portfolio of services, they also broaden its geographic footprint, and make the company less reliant on business from the Gulf of Mexico.

The integration of Optima and ERS has proceeded smoothly, with initial returns on these investments exceeding expectations. Due to the complementary nature of Greywolf, we expect its integration to also be relatively quick.

With the stock's most recent dip, shares now hover near their lowest levels in more than three years and are currently trading at less than ten times the low-end of TTI's revised full-year earnings guidance.


Editor's Note: This article was written by Taesik Yoon of MoneyShow.

Below, find some more great investing and trading content from MoneyShow:

A Great Stock for an Aging Bull

A Partnership That Has No Limits

Big Income From Small Stocks

Twitter: @TopProsTopPicks
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE