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Basic Energy Services Shares Jumped: What You Need to Know

By Travis Hoium | More Articles
December 20, 2011 | Comments (0)

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Basic Energy Services (NYSE: BAS  ) have popped 11% today after receiving an upgrade, while the market anticipates increased demand due to drilling in Angola.

So what: Dahlman Rose upgraded shares to a buy rating yesterday but the big drivers came today. Oil is up 3.6% in trading, driving oil industry service competitors like Key Energy Services (NYSE: KEG  ) , Nabors Industries (NYSE: NBR  ) , and Halliburton (NYSE: HAL  ) all significantly higher today. There may be some bounce from contracts awarded in Angola today as well, which should expand ultra-deepwater offshore drilling significantly.

Now what: Service providers are indirectly dependent on high oil prices to boost business, so the pop on a rally in oil isn't a big surprise. Oil has been all over the place lately, so I would prefer to buy shares of Basic Energy Services when it's reaching lows. In the long term, I think oil will continue to rise, but I'm not seeing today's bounce as a buying opportunity right now.

Interested in more info on Basic Energy Services? Add it to your watchlist by clicking here.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Related Tickers

5/25/2012 4:03 PM
BAS $11.84 Up +0.34 +2.96%
Basic Energy Servi… CAPS Rating: ***
NBR $13.82 Down -0.03 -0.22%
Nabors Industries… CAPS Rating: ***
KEG $10.23 Up +0.16 +1.59%
Key Energy Service… CAPS Rating: *****
HAL $31.37 Down -0.04 -0.13%
Halliburton Compan… CAPS Rating: ****

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