The Zacks Analyst Blog Highlights: National Oilwell Varco, Cameron
International, Range Resources, EPL Oil & Gas and Concur Technologies
CHICAGO, March 14, 2013
CHICAGO, March 14, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include National Oilwell Varco Inc.
(NYSE:NOV), Cameron International Corp. (NYSE:CAM), Range Resources Corp.
(NYSE:RRC), EPL Oil & Gas Inc. (NYSE:EPL) and Concur Technologies, Inc.
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Here are highlights from Wednesday's Analyst Blog:
National Oilwell Varco Now a Strong Sell
On Mar 12, Zacks Investment Research downgraded oilfield services behemoth
National Oilwell Varco Inc. (NYSE:NOV) to a Zacks Rank #5 (Strong Sell).
With markets remaining competitive and pricing likely to be soft, the
company's margins are expected to suffer in the next few quarters. The recent
weakness in the North American onshore drilling environment has also been a
Why the Downgrade?
With new competitors entering the market and shrinkage of capital expenditure
spending by the drilling contractors, NOV – which ranks ahead of Cameron
International Corp. (NYSE:CAM) as the biggest U.S. maker of oilfield equipment
– has seen its new equipment package pricing fall around 10% below the levels
achieved during the peak of 2007–2008.
In particular, NOV's margins have been hit hard by the ongoing North American
drilling slump. We expect the situation – characterized by tepid demand and
weak pricing – to normalize only sometime in late 2013.
Additionally, the company's widespread international operations expose NOV to
certain risks that include embargoes and/or expropriation of assets, exchange
rate risks, terrorism and political/civil sentiment, etc.
As a result of these bearish factors, the tendency for a downward estimate
revision has been more obvious in recent times. In fact, the Zacks Consensus
Estimate for the first quarter has moved down by 14 cents (or 9%) to $1.39 per
share over the last 60 days. The Zacks Consensus Estimate for the full year is
$6.13, down 39 cents (or 6%) in the same timeframe
Stocks that Warrant a Look
While we expect NOV to perform below its peers and industry levels in the
coming months and see little reason for investors to own the stock, one can
look at Range Resources Corp. (NYSE:RRC) and EPL Oil & Gas Inc. (NYSE:EPL) as
good buying opportunities. These domestic energy explorers – sporting a Zacks
Rank #1 (Strong Buy) – have solid secular growth stories with potential to
rise significantly from current levels.
Concur Tech Buys conTgo
Concur Technologies, Inc. (Nasdaq:CNQR) is a leading service provider in
integrated travel and expense management. Recently, it acquired a privately
owned company conTgo. This acquisition will enable CNQR to add location based
comprehensive communication and messaging platform to its customers, suppliers
CNQR intends to deploy conTgo's leading cloud based technology and expertise
to enhance its customers' experience by using itinerary data and location
information with insight and context from past behavior. This will be applied
in the context of tracking employees based on their location and communicating
with them 24X7.
This will also help travelers make travel plans in accordance with their
colleagues using locational data like hotel, city .etc. They can also manage
to take up the transportation services along with their friends from the same
hotel. Additionally, this will make delivery of offers based on itinerary data
This step is expected to give CNQR an extra edge to rise above its
competitors. This will help companies track and communicate with their
travelers at any point of time, whatever be their location.
The terms of the contract were not disclosed. Due to the increased headcount
and the resultant increase in operating cost arising out of this acquisition,
the company's operating margin is expected to decrease marginally for 2013.
However, the company will surely benefit in the long run from the improved
customer experience that CNQR will be able to deliver through this
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