This top pick stock is somewhat off the radar for most energy investors. Keane Group Inc. (NYSE: FRAC) is one of the largest pure-play pressure pumping companies in the United States, with the bulk of its revenue derived from its hydraulic fracturing and wireline businesses. It operates solely in the United States, with a presence in many of the major shale basins. Revenues in 2017 totaled $1.53 billion.
The Jefferies team likes the stock as it has slightly underperformed its peers and may be offering a solid value at current levels. Late last year the company announced a new asset-based revolving credit facility, which expands Keane’s total availability by $150 million to a total of $300 million, subject to a borrowing base. In addition, subject to approval by the applicable lenders and other customary conditions, the New ABL Facility allows for an increase in commitments of up to an additional $150 million, up from a previous amount of up to $75 million.
The $24 Jefferies price target compares with the $22 consensus target price. The shares closed trading on Friday at $15.91 apiece.
Canada’s leading oilfield services firm provides contract drilling, well servicing and strategic support services to its customers. Precision Drilling Corp. (NYSE: PDS) provides customers with access to an extensive fleet of contract drilling rigs, directional drilling services, well service and snubbing rigs, coil tubing services, camps, rental equipment and water treatment units backed by a comprehensive mix of technical support services and skilled, experienced personnel.
Despite the company’s large Canadian exposure, 54% of its U.S. drilling fleet is located in the Permian Basin, which remains the hottest shale area in the United States. This stock may be a top pick for aggressive accounts looking for low-priced stocks to gain more shares.
Jefferies has set its price objective at $4.50. The consensus target is $4.44, and the stock closed on Friday at $2.84 per share.
This stock has been absolutely smoked but has awesome upside potential. U.S. Silica Holdings Inc. (NYSE: SLCA) is a leading producer of commercial silica used in the oil and gas industry and in a wide range of industrial applications. Over its 117-year history, it has developed core competencies in mining, processing, logistics and materials science that enable it to produce and cost-effectively deliver over 200 products to the firm’s customers across all end markets.
The company currently operates nine industrial sand production plants and eight oil and gas sand production plants. With the price of oil stabilizing, many of the short-sellers that targeted the frac sand companies may be starting to cover their positions. Toss in increased shale activity this year and this could be a big winner.
U.S. Silica shareholders are paid a 0.98% distribution. The Jefferies price target is a whopping $58. The posted consensus target is $43.98, and the stock closed at $26.25 per share on Friday.
These five top oilfield services plays not only look like solid picks but they are good value buys for the rest of 2018. With earnings reports for the first quarter not all that far away, it makes sense to buy partial positions and see how the results come in.