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
So what: Second quarter revenue of $296.9 million topped estimates of $286.9 million, but earnings per share of $0.45 fell two cents short of estimates. Investors were concerned that management thinks margins won’t expand beyond 40%-45% on labor and operating costs.
Now what: Management also said it would look for acquisitions in the $10 million-$30 million range and had multiple deals in final stages. Demand is outpacing supply and Basic wants to capitalize by making acquisitions, which should help earnings in the future. I see today’s drop as an opportunity to get shares at a discount after a quarter that only missed expectations by a couple of cents.
Interested in more info on Basic Energy Services? Add it to your watchlist.
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.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
