On Mar 20, Zacks Investment Research upgraded Dawson
Geophysical Company ( DWSN ) to a Zacks Rank
#1 (Strong Buy).DAWSON GEOPHYS (DWSN): Free Stock Analysis
ReportEXTERRAN PTNRS (EXLP): Free Stock Analysis
ReportCOMPRESSCO PTNR (GSJK): Free Stock Analysis
ReportRPC INC (RES): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Why the Upgrade?
The company has registered an earnings surprise of 16.13% in the
first quarter of fiscal 2013, bouncing back from the negative
surprises reported in the last two quarters of fiscal 2012. Net
income in the first quarter 2013 catapulted 154% sequentially on
the back of operational efficiencies and higher utilization rates.
The long-term expected earnings growth rate for this stock is
Dawson Geophysical has a favorable order book and projects
concentrated in the oil and liquids-rich basins of the Bakken
Shale, Mississippi Lime, Eagle Ford Shale, Marcellus Shale and
Permian Basin. These contracts will allow the company to sustain 14
crew operations for the best part of calendar 2013.
The company has a strong financial position with its current ratio
presently at 2.34. This clearly indicates that Dawson Geophysical
has enough liquidity to meet its short-term obligations. In
addition the company has $20 million available under its revolving
Advance equipment purchase is a vital element of the company's
operational success. Dawson Geophysical raised its fiscal
2013 capital budget by $10 million to $50 million. Dawson
Geophysical will use a portion of this budget to purchase
additional cable-less recording equipment and energy source units,
which will further strengthen its operations.
The Zacks Consensus Estimate for fiscal 2013 of $1.51 per share
reflects year-over-year growth of 23.57%. For fiscal 2014, the
Zacks Consensus Estimate of $1.88 per share reflects projected
growth of 24.71% year over year.
Other Stocks to Consider
Other than Dawson Geophysical Company, a few other oil and gas
equipment service companies are also performing well and have a
favorable Zacks Rank. We note that the U.S. oil and gas sector is
expected to do well in 2013 with rising production and mounting oil
prices, boding well for oil and gas equipment service firms. The
stocks worth considering are Compressco Partners,
L.P. ( GSJK ),
Exterran Partners, L.P. ( EXLP ) and RPC
Inc. ( RES
). All of them presently have a Zacks Rank #1 (Strong Buy).