C&J Energy Services
This smaller cap company is well liked across Wall Street desks and is another top pick for 2018 at Deutsche Bank. C&J Energy Services is a completion and production services company that provides well construction, well completions and well services to the oil and gas industry.
The company also manufactures, repairs and refurbishes equipment used in the oilfield services industry. It operates in various North American onshore basins. Its Completion Services segment includes the hydraulic fracturing services, cased-hole wireline services, coiled tubing services and other well stimulation services. Its Well Support Services segment includes services, including rig services, fluid management services and other special well site services.
C&J trades below ProPetro and also below the average of the other pressure pumpers. Top analysts believe its coiled tubing and cementing businesses could be higher returning than fracking and continue to generate healthy free cash flow generation for the company in 2018.
Deutsche Bank has a $41 price target, while the consensus target is $39.68. Shares were last seen trading at $33.20.
This is a top mid-cap pick that is still trading well below highs printed last spring. Core Laboratories provides reservoir description, production enhancement and reservoir management services to the oil and gas industry in the United States, Canada and elsewhere. It operates through three segments.
The Reservoir Description segment comprises the characterization of petroleum reservoir rock, fluid and gas samples. This segment offers analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry.
The Production Enhancement segment includes services and products relating to reservoir well completions, perforations, stimulations and production. This segment offers integrated services to evaluate the effectiveness of well completions and to develop solutions to enhance the effectiveness of enhanced oil recovery projects.
The Reservoir Management segment combines and integrates information from reservoir description, as well as provides production enhancement services to increase the production and improve recovery of oil and gas from its client’s reservoirs.
Shareholders receive a 2.18% dividend. The $109 Deutsche Bank price target is less than the consensus target of $110.40. The shares were trading at $105.40.
Superior Energy Services
Superior Energy Services serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.
The company is a favorite mid-cap stock to play the U.S. land services recovery, and analysts think investors should see impact of cost reductions as this year ends and we head into 2018, which some feel could help offset pricing pressure. The sector downturn in 2016 and 2017 led to reductions in capex and capacity attrition, a positive for the survivors like Superior, that have managed both extremely well in what has been a very difficult environment.
Deutsche Bank has set its price target at $10, while the consensus target is $11.60. Shares traded at $9.20.
These are five stocks to buy for big potential gains in 2018. They run the risk gamut so investors need to match their capital investment to their risk tolerance. One thing is for sure, the sector offers far more value than many and makes sense to buy now.