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

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For Immediate Release
 
Chicago, IL – May 20, 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 Google Inc. (GOOGL-Free Report), Baker Hughes Inc. (BHI-Free Report), Halliburton Co. (HAL-Free Report), Schlumberger Ltd. (SLB-Free Report) and Flotek Industries Inc. (FTK-Free Report).
 
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Here are highlights from Monday’s Analyst Blog:

Google Acquires Word Lens Maker

Google Inc. (GOOGL-Free Report) recently acquired Quest Visual Inc., the maker of the Word Lens translation application. The staff of Quest Visual will join Google Translate. However, neither party disclosed the financial terms and conditions of the deal.

Google Translate is the search engine’s free translation service that offers instantaneous translations of words, sentences and web pages between any combinations of different languages. With this deal, Google can integrate Quest’s advanced translation technology into its own platform to boost its extensive language exposure and translation tools in the future.

Moreover, the acquisition of this innovative technology seems a smart move since it will help Google in achieving its aim of a futuristic world with its innovative software and product offerings.

Quest Visual Inc. created its famous camera-based free Word Lens app in 2010, which translates words in print from one language to another in real-time without a data connection. Word Lens scans and identifies printed words by using built-in cameras on smart devices, translates them into another language and shows the results on the device’s display.

U.S. Drilling Rig Count Rises

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 both oil and gas-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 1,861 for the week ended May 16, 2014. This was up by 6 from the previous week’s rig count and indicates the second increase in as many weeks.

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 1,769. 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 ascended by 9 to 1,791, offshore drilling was down by 2 to 57 rigs, while inland waters activity decreased by 1 to 13 units.

Natural Gas Rig Count: The natural gas rig count – which last month slumped to its lowest point since May 1993 – increased for the first time in 3 weeks to 326 (a gain of 3 rigs from the previous week). Despite the weekly growth, the number of gas-directed rigs is down by 60% from its recent peak of 811, achieved in 2012.

In fact, the current natural gas rig count remains 80% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 354 active natural gas rigs.

Oil Rig Count: The oil rig count – that rocketed to a 27-year high of 1,534 in Apr 2014 – was by 3 to 1,531. It has recovered strongly from a low of 179 in Jun 2009, rising 8.6 times. The current tally is also above the previous year’s rig count of 1,408.

Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 4 remained unchanged from the previous week.

Rig Count by Type: The number of vertical drilling rigs rose by 2 to 406, 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 4 to 1,455. In particular, horizontal rig units increased by 5 from the last week’s level to reach an all-time high of 1,248.

Gulf of Mexico (GoM): The GoM rig count was down by 2 to 56. Both oil and gas rigs decreased by a unit each from their week-ago levels to 42 and 14, respectively.

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 firm – sporting a Zacks Rank #1 (Strong Buy) – has a solid secular growth story with potential to rise significantly from the current level.

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

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