Oil went down yesterday and is still under 40. The good news is that it doesn't need oil to be high to sell its services like RIG. It just needs oil being pumped. This is good news. '09 estimated earnings- .46- .99 by analyst.
The bad news- it's debt tripled last year and naturally the debt to equity ratio went up. Thus its riskier than it was this time last year. Assuming it doesn't need to refinance or the credit markets return to normal, it is currently in fine shape assuming oil doesn't plunge further.
The Wild Card- Huge short position! Don't know if they covered during the last run up. Guessing a LOT did.
Summary- This stock moves on oil AND credit flow. If oil stabalizes and financials continue to improve there should be far more profit potential than the risk at this price range IMHO.
I think the stock as a trading vehicle had moved too quickly for a short period of time and had to retrace. In this price range, there are likely people with many shares who exert pressure on the stock when it gets over-bought. When you combine this factor with a bad day for oil, things went a little crazy.
Humble opinion! Flotek is a company that works for companies that pump oil and gas, ie: gives tools, chemicals,services and any other item needed to them!!. This company have invented new optimal technology (its valve for instance), and merge with companies who serve this area. FTK optimizes the process of taking oil and gas from any type of sources, so it is a good technical company to serve this Industry when prices of oil are up or down. In any event (OIL UP or Down) ----> it is a service company, that accomplish the process in any stage of pumping oil and gas from an optimal point of view. It went public to acquire enterprises doing the same. Here is where I think that it does not matter what the price of oil is because this company will be call to do its service anyway. By the way, and according to the news given by the analysts of this Industry FTK has invented tools and processes that optimize the pumping of oil and gas from any type of sources!!.
I have few questions for someone who have good idea with company financials 1.Can the company operate and sustain profit given the oil price hover between 35-45 range 2.Will it be able to operate for atleast 2 quarters if there is a slump.I notice they don't have any cash left. 3.What will be the PPS if it gets bought out. 4.Iam just wondering how they were managing to get profits in the last quarter recession scenario.Are they inflating profits?. 5.Price projections if oil goes to 60-70 Is it a good time to buy?.
There is no logic in the markets. All fundamentals are disconnected from common sense because no one trusts that another liar, cheat, thief of a financier or politician will not be disclosed snuggled under some mossy rock.