Is Baker Hughes' Stock a Buy?
Oil is back! Or, at least that appears to be the attitude on Wall Street. So far this year, the Dow Jones US Select Oil Equipment & Services Index is up 34% compared to a 22% decline for the S&P 500. After years of little investment in the oil patch, higher oil prices are slowly leading to increased capital spending budgets. That should benefit services companies immensely in the coming years. One company that stands out in the industry is Baker Hughes (NASDAQ: BKR). Its stock is wildly underperforming the sector so far this year.
Is the market forgetting about the world's third-largest oilfield services company, or is there perhaps something more to the story? Let's take a closer look at the oil services company to see if Wall Street is wrong and Baker Hughes' stock is a buy today.
Baker Hughes has a lot to like about it, and the thesis for buying it is solid. It is a storied business in the oil patch that got its start over 100 years ago making drill bits. For decades it has been acquiring and consolidating parts of the oilfield services industry to become the third-largest equipment and services provider behind Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL).
Source Fool.com
