Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



3 Unique Energy Companies on My Watchlist

The amazing growth in oil and gas production has the country pondering what had been an unthinkable dream: an energy independent future. The U.S. still has a long way to go to make that dream a reality. While many companies are working overtime to make the dream reality, here are three unique ones that I’m watching.

Core Laboratories (NYSE: CLB  )
I'll admit that the first time I heard of Core Laboratories I thought I was going to read about a biotechnology company. Instead, Core helps oil and gas companies by analyzing rock and fluid samples to help them get the resources out of the ground in the most efficient way. Think of the company as the provider of the science behind the oil and gas industry.

The problem is that science doesn’t come cheap and the stock trades at about 30 times earnings. It’s not been getting any cheaper either -- the stock is up more than 25% in the past three months. However, that premium is likely justified given the double-digit earnings growth that analysts project over the next couple of years. The company has a huge runway of growth as the energy industry moves away from the wildcat mentality to a more strategic science and technology driven approach to energy exploration. Core would top my list of companies to buy on a pullback.

FMC Technologies (NYSE: FTI  )
Another strategic technological company pick, FMC Technologies, brings technology solutions to the deep, as in deepwater drilling. The company designs, manufactures and services components for the subsea processing of oil and gas from deepwater wells. Given that last year was the best year ever for deepwater discoveries, and that new discoveries are still being made, the future looks bright for FMC.

Like Core, FMC is also up about 25% over the past few months, and its stock is about as expensive at 30 times earnings. However, analysts do expect a bit faster growth from the company given the tremendous activity in deepwater drilling. That undersea activity, however, is attracting more attention, with Schlumberger (NYSE: SLB  ) recently entering the market through a joint venture. Given the size and global scale of the oil-field services giant I’m a bit apprehensive to add FMC to my portfolio given its recent rise. That’s why I’d prefer to wait for a pullback on this one. The market can’t go straight up forever, right?

Heckmann (NASDAQOTH: NESC  )
This environmental solutions provider offers onshore drillers a one-stop shop for their fracking water needs. It covers the full life cycle of water: the company delivers it to the site, collects it, treats and recycles what it can, and then disposes of the remains. About 70% of the company’s shale business is now devoted to oil and liquid shale plays, meaning that it’s not as affected by the slowdown in natural gas drilling as one might think. The company has made several moves over the past year to diversify its revenue, which is a good thing considering that Chesapeake (NYSE: CHK  ) previously made up 25% of its revenue. Given Chesapeake's debt problems, that wasn't exactly a comforting thought. The company now boasts 20,000 customers, though its revenue is still fairly concentrated on top exploration and production companies. 

I made the new and improved Heckmann -- soon to be Nuverra Environmental Solutions -- my one stock to buy this month. The good news, at least for my stock picking pride, is that the stock is up 20% since I called it out. The bad news is I never had the chance to add it to my portfolio. Unlike the other two companies on the list, Heckmann is still cheap because of how misunderstood it is by the market.

My Foolish take
Right now I’m most interested in Heckmann. Of the three I think it has the best short- and long-term growth prospects. While it’s not as cheap as it was earlier this month, shares are still more than 30% off where it was at the end of 2011 and this is a much stronger and more diversified company that it was back then. That being said, I'm not ready to buy just yet so Heckmann will remain on my watchlist.

Still can't get your fill of intriguing companies to add to your watchlist? If you want three more currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For FREE access to this special report, simply click here now.

Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 22, 2013, at 2:48 PM, longinvest wrote:

    With such a glaring article about HEK, not sure why you don't pull the trigger. I am long on HEK and have been since last year.

  • Report this Comment On March 22, 2013, at 3:12 PM, TMFmd19 wrote:

    @longinvest - because I'm cheap and the Fool's trading rules lock me out for a few days when I write about it.


  • Report this Comment On March 22, 2013, at 3:21 PM, longinvest wrote:

    Makes sense. Late last year, before leading up to the Power Fuels acquisition, they sent out info to shareholders that they have the opportunity to split the stock 2 for 1 or 3 for 1. I guess to make it lkook more attractive to investors. has not happened yet. So instead of $4, it would jump to $8 or $12. Buy when you can. I am as I can.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2327717, ~/Articles/ArticleHandler.aspx, 10/1/2016 11:58:12 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 14 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:02 PM
CLB $112.33 Up +1.85 +1.67%
Core Laboratories CAPS Rating: ****
FTI $29.67 Up +0.16 +0.54%
FMC Technologies CAPS Rating: ****
NESC $0.20 Down -0.03 -13.00%
Nuverra Environmen… CAPS Rating: ***
CHK $6.27 Up +0.15 +2.45%
Chesapeake Energy CAPS Rating: ***
SLB $78.64 Up +1.27 +1.64%
Schlumberger CAPS Rating: ****