The key to investing has always been to buy when everybody is selling and to sell when everybody is buying. Seems simple enough, but as all investors know it is never that easy. A new research report from JPMorgan stresses that the energy downturn could last the rest of 2015 and well into 2016. The question is could now be the time to be buying?
The JPMorgan team are in lockstep with most of the firms we cover at 24/7 Wall St., as they think that the “lower for longer” mantra may end up being correct, and there could be more cutting of budgets and hard times. With that said, any positive signs the energy sector signals and the shorts and weak hands that are throwing in the towel at sector lows may have a judgement day.
We screened the list of oil services stocks rated Outperform at JPMorgan for those with the biggest upside potential, and we found four that are well-liked across much of Wall Street.
C&J Energy Services
This smaller cap company is well-liked across Wall Street desks. C&J Energy Services (NASDAQ: CJES) is an independent provider of premium hydraulic fracturing, coiled tubing, wireline, pumpdown and other complementary oilfield services with a focus on complex, technically demanding well completions. In addition to C&J’s suite of completion, stimulation and production enhancement services, the company manufactures, repairs and refurbishes equipment and provides parts and supplies for third-party companies in the energy services industry. Earlier this year it announced the purchase of Nabors Industries’ production services unit.
The company fits nicely into positive sector opportunities for pressure pumping, and the company has been mentioned in takeover chatter from time to time. The stock has traded back to the January lows, after doubling from this area in two months in the spring.
The JPMorgan price target for the stock is $20, and the Thomson/First Call consensus target is $17.71. Shares closed Tuesday at $9.07. Trading to the JPMorgan target would be over a 100% gain.