SouFun Holdings, Cummins, Baker Hughes, Halliburton and Schlumberger highlighted as Zacks Bull and Bear of the Day
CHICAGO, Dec. 12, 2013 /PRNewswire/ -- Zacks Equity Research highlights SouFun Holdings Limited (NYSE:SFUN-Free Report) as the Bull of the Day and Cummins (NYSE:CMI-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onthe Baker Hughes Inc. (NYSE:BHI-Free Report), Halliburton Co. (NYSE:HAL-Free Report) and Schlumberger Ltd. (NYSE:SLB-Free Report).
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Here is a synopsis of all five stocks:
Looking for a way to play the growth of the Chinese middle class? Look no further than the core aspiration and spending driver of consumers everywhere: the home.
SouFun Holdings Limited (NYSE:SFUN-Free Report) is the leading real estate Internet portal in China. They also operate home furnishing and improvement websites for Chinese consumers and generate advertising revenue primarily from online real estate companies.
Through SouFun's Websites, it provides marketing, e-commerce, listing, and other value-added services for China's real estate and home-related sectors. The company maintains about 100 offices to focus on local market needs and its database contains real estate related content covering more than 320 cities in China.
With this multi-prong strategy, the company has built a large and active community of users who are attracted to its comprehensive content for the home buyer, seller, investor, and property developer.
Cummins (NYSE:CMI-Free Report), the world-class leader in diesel engines, was last a Zacks #5 Rank Strong Sell in May of this year when it was trading $116. It subsequently dropped to $105 at the June lows before beginning a summer rally with the broad market up to its July 30 earnings report.
That quarterly beat of 11%, after April's 20% EPS miss, inspired analysts to brighten their outlook and to raise estimates again which pushed the stock back up to a Zacks #2 Rank Buy on August 2 before CMI rallied to new all-time highs near $140 in October.
But then Cummins did it again with another miss in late October, sending the stock tumbling down to $125. The company also notched revenue and margin guidance down for 2013. The majority of analysts immediately lowered their EPS estimates and outlook for this year and next.
The downward revisions were enough to knock CMI back down into #4 purgatory in November and then the #5 cellar again in this week.
Additional content:
U.S. Drilling Rig Count Rises
In its weekly release, Houston-based oilfield services company Baker Hughes Inc. (NYSE:BHI-Free Report) reported a rise in the U.S. rig count (number of rigs searching for oil and gas in the country). This upside can be attributed to an increase in the tally of both oil and natural gas-directed rigs.
The Baker Hughes' data, issued since 1944, acts as an important yardstick for energy service providers in gauging the overall business environment of the oil and gas industry.
Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,775 for the week ended Dec 6, 2013. This was up by 12 from the previous week's rig count and indicates the second increase in as many weeks.
The current nationwide rig count is more than double the lowest level reached in recent years (876 in the week ended Jun 12, 2009), though it is still below the prior-year level of 1,800. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending Aug 29 and Sep 12.
Rigs engaged in land operations ascended by 9 to 1,696, inland waters activity was down by 1 to 18 rigs, while offshore drilling increased by 4 to 61 units.
Natural Gas Rig Count: The natural gas rig count – which, earlier this year, slumped to its lowest point since Jun 1995 – increased for the first time in 3 weeks to 375 (a gain of 8 rigs from the previous week). Despite the weekly growth, the number of gas-directed rigs is down by 54% from its 2012 peak of 811.
In fact, the current natural gas rig count remains 77% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 417 active natural gas rigs.
Oil Rig Count: The oil rig count – that rocketed to a 25-year high of 1,432 in Aug last year – jumped by 6 to 1,397. It has recovered strongly from a low of 179 in Jun 2009, rising 7.8 times.
Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 3 was down by 2 from the previous week.
Rig Count by Type: The number of vertical drilling rigs rose by 1 to 415, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was up by 11 to 1,360. In particular, horizontal rig units – that reached an all-time high of 1,193 in May 2012 – increased by 10 from the last week's level to 1,137.
Gulf of Mexico (GoM): The GoM rig count was up by 4 to 59. Oil drilling remained steady at 39 rigs, while gas rigs improved upon their week-ago level by 4 to 20.
Conclusion
A Key Barometer of Drilling Activity: An increase or decrease in the Baker Hughes rotary rig count heavily weighs on the demand for energy services – drilling, completion, production etc. – provided by companies that include large-cap names like Halliburton Co. (NYSE:HAL-Free Report) and Schlumberger Ltd. (NYSE:SLB-Free Report).
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