Tuesday, August 14, 2012

The Extrme Relative Value Of C&J Energy Services

After reporting earnings on Thursday morning, C&J Energy Services (CJES) fell sharply after initially jumping more than 5%. For some reason the market was disappointed with earnings that easily beat estimates and guidance of a significantly accretive acquisition.

The company is an oil services firm that focuses on hydraulic fracturing, coil tubing, and wireline services primarily in the Eagle Ford Shale and Permian basin.

As mentioned with the article on SodaStream (SODA) last week, the market appears fixated on certain stocks while allowing others to slide. C&J not only has the lowest multiple in the sector, but it also appears to have better operating results. Not only did the company mostly sidestep the natural gas issue by focusing on oily plays, it also has made attractive acquisitions. On top of that, it has mostly avoided the guar and sand issues that have plagued the other oil service companies.


Read the full article on Seeking Alpha.


Disclosure: Long CJES. Please review the disclaimer page for more details. 




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