Out Fox The $treet

Weatherford reported disappointing Q3 results. The company has left the stock for dead while the market is starting to rebound. The stock remains a speculative play in the sector for a catch-up trade. As other industry players trade near multi-year highs,  Weatherford International (NYSE: WFT )  is still trading at the lows. The recent  quarterly results  weren't the best, but the market appears stressed out for no reason. Read the full article on Seeking Alpha.  Disclosure: Long WFT. Please review the disclaimer page for more details. 

Baker Hughes and Halliburton officially terminated the merger over the weekend. The company will collect the $3.5 billion termination fee by Wednesday, providing several opportunities to improve the balance sheet. The stock might not rebound in the near term, but investors should follow a previous example of another failed merger to see where Baker Hughes might end up. As the news flow recently suggested,  Baker Hughes (NYSE: BHI )  and  Halliburton (NYSE: HAL )   called off  their merger over the weekend. Both companies will hold conference calls on Tuesday to discuss the new plans as independent companies. The prime focus of the break up going forward is the $3.5 billion fee that Baker Hughes will collect from Halliburton by Wednesday. Read the full article on Seeking Alpha.   Disclosure: Long HAL. Please read the disclaimer page for more details.

Baker Hughes reported highly confusing Q1 results. The oilfield services company remains constrained by the pending merger with Halliburton. The solid balance sheet and termination fee will ultimately make the stock a very strong buy. Due to the lingering and possibly failed merger with  Halliburton (NYSE: HAL ) ,  Baker Hughes (NYSE: BHI )  is a jumbled mess.  Q1 results confirmed this position, but the stock rallied anyway following the bad news. Read the full article on Seeking Alpha.  Disclosure: Long HAL. Please review the disclaimer page for more details.

The Department of Justice approval sets Schlumberger up for completing the Cameron merger on time. The deal remains on path to provide a boost to Schlumberger's EPS estimates. A big concern remains that the market won't appreciate the lower margins from the Cameron business. The recommendation remains to hold off on owing this stock until after the company releases the merged financials. The recent approval of Schlumberger 's (NYSE: SLB ) purchase of Cameron (NYSE: CAM ) sets up the deal to close in Q1'16. The oilfield service giant faced limited regulatory impact from buying the Cameron business that has little overlap. Read the full article on Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details. 

Schlumberger paid a hefty premium for the low-margin business of Cameron. A promising business combination isn't always financially rewarding to shareholders. The recommendation is to stay away from Schlumberger until the merger integration starts achieving synergies by late 2016. One of the most overlooked aspects of corporate combinations is the psychological impacts on stock multiples. A merger might be accretive to the acquirer, but if the combination reduces the growth rate or margins going forward, it could impact the valuation multiple assigned the stock. A stock that currently holds a premium multiple might suddenly lose that valuation due to lower growth rates going forward or less impressive margins. Read the full article on Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details. 

Summary Shareholder approved the merger of Halliburton and Baker Hughes. Halliburton is moving forward with asset sales suggesting the U.S Justice Department is working towards a positive solution. The new Halliburton still trades at an attractive valuation providing potential alpha for the sector with the ultimate return based on oil prices. The recent shareholder approvals by Halliburton (NYSE: HAL ) and Baker Hughes (NYSE: BHI ) place the megadeal one step closer to completion. The current oil market weakness causing the onshore drilling rig count reductions continue to hide the shareholder benefits of this merger. Not to mention, the current downturn is allowing both firms to cut costs that could improve margins during the next market boom. Read the full article on Seeking Alpha. Disclosure: Long HIG. Please review the disclaimer page for more details. 

 Summary Solid results from Schlumberger surprised the market. Oilfield service firms are likely to maintain growth in an environment of higher production. Oilfield service stocks offer atttractive values now that stocks have declined due to an overabundance of fears.  With the release of Q314 earnings in the oil services sector, investors quickly learned that all companies in a sector aren't created equal. Not only that, but all companies involved in a particular industry aren't impacted the same way.  Read full article at Seeking Alpha.   Disclosure: No positions mentioned. Please review the disclaimer page for more details.

The CEO of Halliburton ( NYSE: HAL     ) went on record during the first-quarter earnings call that he saw a turn in the North American energy markets. In fact, the CEO hadn't been that bullish on the area since late in 2011. He recently followed that up with an even more bullish claim that the market has definitely turned to full-growth mode. The question for investors is what to do with this information now that the stock has already soared to all-time highs and is trading up to $74 from only $40 this time last year. Read the full article here . Disclosure: Long HAL. Please review the disclaimer page for more details. 

Shares of Weatherford International Ltd ( NYSE: WFT     ) surged to multi-year highs following the news of a solid quarter. The oilfield services firm has long been pressured by disappointing results and struggling operations, but the management team might finally be focused on the right metrics. The key to the turnaround is a focus on improving operations and trimming the fat. Weatherford is in the middle of a cost-cutting program that will eliminate 7,000 employees, though the company suggests that the cut is only eliminating duplicated functions and operations. When complete, the move will save the company $500 million annually. The company's recent results suggest that it is working. Read full article here . Disclosure: Long WFT. Please read the disclaimer page for more details.

After constantly hearing about the severe weather disruptions for the energy sector in North America, Baker Hughes ( NYSE: BHI     ) reported one of the strongest quarters in recent history. Even more surprising to investors not following the oil services industry is that the stock surged to highs not seen since the summer of 2011 on the bullish news. Baker Hughes is a global leader in supplying oilfield services, products, technology, and systems to the oil and natural gas industry. Though the company has a substantial global business approaching $24 billion, it pales in comparison to Schlumberger ( NYSE: SLB     ) , which reported first-quarter earnings on the same day. Schlumberger has a massive oilfield services business expected to reach annual sales of nearly $50 billion this year. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Summary Schlumberger generated substantial earnings growth despite severe weather. North America revenue saw a sequential increase. Oil services stocks sit near all-time highs. While the oil services firms had every excuse to turn in a weak first quarter, the initial results were very solid. Baker Hughes ( BHI ) solidly beat analyst expectations and Schlumberger ( SLB ) squeaked out a small beat. Read the full article at Seeking Alpha. Disclosure: Long HAL. Please review the disclaimer page for more details. 

Several trends are colliding to make 2014 likely a lucrative one for investors in domestic oil services firms. First, natural gas inventories have plunged 40% below five-year averages. Second, domestic drilling rig counts are starting to move up. Third, there has been a pullback in deepwater capital budgets despite high oil prices. All of these scenarios set up the need for increasing domestic drilling budgets, at least short-term. Despite the bullish trends and the bull market in stocks, a lot of the domestic oil service stocks trade below levels of the 2011 peaks. The firms of intrigue include: C&J Energy Services ( NYSE: CJES     ), Baker Hughes ( NYSE: BHI     ), and even lowly Key Energy Services ( NYSE: KEG     ). Read the full article here . Disclosure: Long CJES. Please review the disclaimer page for more details. 

Within every sector, the difference between the winning and losing stocks can be very dramatic. In the case of the oil services sector, the drastic valuation differences between Schlumberger ( NYSE: SLB     ) and Weatherford International ( NYSE: WFT     ) are at the extremes. Though the sector has four domestic heavyweights, Schlumberger and Weatherford are the most focused on the international scene, providing a clear example for investors that the right geographical focus isn't enough. Over the last few years, Weatherford has lacked execution due to tax issues and costs overruns, which have hurt the stock. Read the full article here . Disclosure: Long WFT. Please review the disclaimer page for more details. 

Don't look now, but the prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs above $4/btu. At the same time, most of the domestic oil services stocks have slumped to multi-month lows. The combination could present a buying opportunity for the domestic oil service firms of Baker Hughes ( NYSE: BHI     ) , Weatherford ( NYSE: WFT     ) , and C&J Energy Services ( NYSE: CJES     ) to name a few that are intriguing.   A major reason for recent weakness in the stocks has been less-than-robust capital expenditure plans by exploration firms to end the year. The general guidance for the fourth quarter wasn't overly robust, but the recent cold weather and reduction of natural gas inventories has pushed levels below prior years. The latest weekly report from EIA showed inventory levels 3% below the 5-year average levels. Also, the inventory number is already a substantial 7.2% below the levels of last yea...

Don't look now, but the prolonged cold snap in the U.S. has pushed natural gas prices toward multi-year highs above $4/btu. At the same time, most of the domestic oil services stocks have slumped to multi-month lows. The combination could present a buying opportunity for the domestic oil service firms of Baker Hughes ( NYSE: BHI     ) , Weatherford ( NYSE: WFT     ) , and C&J Energy Services ( NYSE: CJES     ) to name a few that are intriguing.   A major reason for recent weakness in the stocks has been less-than-robust capital expenditure plans by exploration firms to end the year. The general guidance for the fourth quarter wasn't overly robust, but the recent cold weather and reduction of natural gas inventories has pushed levels below prior years. The latest weekly report from EIA showed inventory levels 3% below the 5-year average levels. Also, the inventory number is already a substantial 7.2% below the levels of last yea...

After a few rocky years with major accounting issues regarding taxes and major losses from an Iraqi contract, Weatherford International ( NYSE: WFT     ) finally appears on a path to success. The oil services firm famously shifted headquarters to Switzerland back in 2009 to reduce taxes and ended up paying a higher effective tax rate, then ran into issues requiring a restatement of taxes. All of those issues led to a major slump in the stock as 2012 ended. In the latest quarter, the company showed improvements in operations with a focus on margins; the effective tax rate also dropped to an incredible low rate of 20%. Finally, Weatherford is on track and could achieve numbers comparable to other top oil service firms such as Halliburton ( NYSE: HAL     ) and Baker Hughes ( NYSE: BHI ...

For a couple of years now, C&J Energy Services ( NYSE: CJES     ) has had the potential to be a top oil services stock benefiting from the shale boom in the U.S. Unfortunately, low natural gas prices have pressured margins and held the stock of this budding hydraulic fracturing specialist in check during the last two years. C&J Energy is a leading provider of premium hydraulic fracturing, coiled tubing, pressure pumping, wireline and other complementary completion services. The company has a focus on the most complex and technically demanding well completions. C&J Energy has a strong presence in the Bakken Shale, Eagle Ford, and Permian Basin. The recent results from multinational oil service firms  Baker Hughes ( NYSE: BHI     ) and Schlumberger ( NYSE: SLB     ) have pushed the sector higher, but analysts from Cowen & Co cut the rating on C&J Energy due to expected pricing pressure. The stock continues to br...

Small Cap Insight Nothing like a name change to make the market forget about a previously hot stock. Back in May, Heckmann changed its name to Nuverra Environmental Solutions ( NES ) to more accurately reflect its focus on environmental solutions in the energy sector. The stock has done nothing but plunge since the beginning of June whether due to the sector weakness or the market losing focus on the 'new' company. Either way, the stock is trading at lows not seen since the revolutionary merger that combined Heckmann with Power Fuels back in the summer of 2012. The company dedicated to the protection and enhancement of environmental solutions for the removal and disposal of restricted fluids primarily from shale drilling activities isn't exactly benefiting from the boom in production from shale. As environmentalists fret over the safety of the fluids used in fracking, Nuverra was suppose to benefit from the need to safely dispose of those 'dangerous...

As earnings for Q113 start up, one of the most intriguing stocks remains Weatherford International ( WFT ) . The company has infamously failed to accurately remediate federal income taxes for several years now. Even as Weatherford reported record revenues for Q412, earnings failed to match the previous years. The company also incredibly recorded an effective tax rate for the quarter of an amazing 92% to cap off a string of disappointing results. The company is a multi-national oilfield services firm with a large international presence operating in over 100 countries. For 2012, international revenue accounted for 58% of total revenue. Notably it also focuses more on liquids production in North America. With domestic natural gas prices surging, all oil services firms will benefit though Halliburton ( HAL ) and Baker Hughes ( BHI ) are the most focused on domestic gas. Weatherford is a play on that rebound as domestic pricing will improve, but in addition the stock will ...

Just about 50 days ago, Heckmann (HEK) announced the deal to purchase Power Fuels. The deal turns Heckmann into a domestic leader in the wastewater removal industry supporting the shale oil and gas boom. See our article "Heckmann Makes Game-Changing Merger" for more details on the deal. While the stock initially popped from just above $2.50 all the way to $5, it has now slumped all the way to the $3.60s. Lower drilling in the domestic U.S. where both Heckmann and Power Fuels operate has impacted the excitement over the deal. Have the economics really changed that much to warrant a 30% drop? Makes us wonder what is going on. Read the full article at Seeking Alpha. Disclosure: Long HECK. Please review the disclaimer page for more details.