The Zacks Analyst Blog Highlights: Baker Hughes, Halliburton, Schlumberger, Flotek Industries and Ford Motor

Zacks Equity Research

For Immediate Release
 
Chicago, IL – August 12, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the company Baker Hughes Inc. (BHI-Free Report), Halliburton Co. (HAL-Free Report), Schlumberger Ltd. (SLB-Free Report), Flotek Industries Inc. (FTK-Free Report) and Ford Motor Co. (F-Free Report).
 
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Here are highlights from Monday’s Analyst Blog:

Baker Hughes Counts 19 More Rigs, Oil Rigs Rise 15

In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (BHI-Free Report) reported a rise in the U.S. rig count (number of rigs searching for oil and gas in the country). This can be attributed to an increase in the tally of mainly oil-directed rigs.

The Baker Hughes data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.

Analysis of the Data

Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,908 for the week ended Aug 8, 2014. This was up by 19 from the previous week’s rig count.

The current nationwide rig count is more than double the lowest level reached in recent years (876 in the week ended Jun 12, 2009) and is above the prior-year level of 1,770. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending Aug 29 and Sep 12.

Rigs engaged in land operations rose by 18 to 1,832, offshore drilling was up by 4 to 62 rigs, while inland waters activity fell by 3 to 14 units.

Natural Gas Rig Count: The natural gas rig count – which slumped to its lowest point last month since May 1993 – was up by 3 to 316. As per the most recent report, the number of natural gas-directed rigs is down approximately 61% from its recent peak of 811, achieved in 2012.

In fact, the current natural gas rig count is 81% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 386 active natural gas rigs.

Oil Rig Count: The oil rig count was up by 15 to 1,588. The current tally is way above the previous year’s rig count of 1,385. It has recovered strongly from the low of 179 in Jun 2009, rising 8.9 times.

Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) rose by 1 to 4 from the previous week.

Rig Count by Type: The number of vertical drilling rigs rose by 5 to 378, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was up by 14 to 1,530.

Gulf of Mexico (GoM): The GoM rig count here was up by 2 to 60.

Conclusion

A Key Barometer of Drilling Activity: An increase or decrease in the Baker Hughes rotary rig count heavily weighs on the demand for energy services – drilling, completion, production, etc. – provided by companies that include large-cap names like Halliburton Co. (HAL-Free Report) and Schlumberger Ltd. (SLB-Free Report).

However, our preferred pick in this group is Flotek Industries Inc. (FTK-Free Report). The Houston, TX-based company – carrying a Zacks Rank #2 (Buy) – has a solid secular growth story with the potential to rise significantly from the current level.

Ford China Sales Up 25% in July, 33% YTD

Ford Motor Co. (F-Free Report) sold 90,775 vehicles in China in Jul 2014, which reflects a 25% year-over-year increase over 72,834 units sold in Jul 2013. Year-to-date sales of Ford in the world’s largest automobile market amounted to 640,031 units, up 33% from 480,555 vehicles sold in the first 7 months of 2013.

Ford Kuga recorded a 10% year-over-year increase in sales to 10,450 units in Jul 2014. Ford EcoSport’s sales increased 22% to 7,302 vehicles in the month. Apart from Kuga and EcoSport, Ford Mondeo also remained popular in China. The car’s sales grew an outstanding 807% to 10,154 units in Jul 2014. Meanwhile, sales of the Ford Transit commercial vehicle reached 6,066 units in July, up 11% year over year.

Meanwhile, Ford’s passenger car joint venture, Changan Ford Automobile (CAF) witnessed a 19% year-over-year increase in vehicle sales in Jul 2014 to 64,130 units.

Further, Ford's commercial vehicle investment in China, Jiangling Motors Corporation (JMC.V), sold 22,031 wholesale vehicles in the month of July. Sales surged 33% over Jul 2013.

Going ahead, Ford plans to introduce 15 new vehicles in China by 2015-end. Moreover, in a bid to boost capacity to meet the rising demand from the nation, the automaker is setting up 3 new manufacturing plants in addition to the 7 plants it already has in the country.

Ford currently carries a Zacks Rank #3 (Hold).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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