Markets
MRC

Why MRC Global Inc. (MRC) Stock Dropped 11% Today

MRC Chart

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Oil and gas industry pipe, valve, and fitting supplier MRC Global saw its stock fall as much as 11% in early trading Friday. As of 1:25 p.m. EST, it has gained back some of that early loss, but remained down more than 7%. Much like essentially every other company tied to the oil and gas business, MRC Global's stock is well off its 2014 peak:

MRC data by YCharts .

So what: MRC Global reported earnings after the market close on Thursday, and came up short of analyst expectations, with adjusted earnings per share of $0.33 falling well below the $0.46 Mr. Market was counting on. The company also expects 2015 to be a tough year for its upstream business.

Now what: The biggest concern with MRC Global is definitely the weakness in upstream for the foreseeable future. For those not in the know, upstream is essentially the exploration and production side of the oil and gas business, and there will be significantly less new drilling activity in 2015, as producers cut back on their output. This is a real negative for MRC, but isn't the end of the world, as the company also supplies the midstream segment, which largely encompasses pipelines for distribution of gas and oil products, along with storage facilities.

This segment isn't likely to suffer to the same extent in 2015 -- to the contrary, there should be some growth as more pipelines are needed to connect production centers to demand centers. However, it's not clear how much MRC Global will benefit from this upside, and management is expecting it will have lower sales in 2015 than 2014. If you're looking to invest in companies that service the oil and gas industry, MRC Global probably would not be my first choice.

How to invest in the technology fueling the U.S. energy boom

As the price of oil plummets, savvy investors are looking for a way to invest in this new energy dynamic. And there's one high-caliber company in the oil-services sector using advanced technology to profit from the U.S. oil boom. Given the country's ongoing quest to extract more and more oil, I strongly urge you to claim your copy of our brand-new investigative report on this company helping fuel its boom. Simply click here for access .

The article Why MRC Global Inc. ( MRC ) Stock Dropped 11% Today originally appeared on Fool.com.

Jason Hall has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MRC

Other Topics

Stocks

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More