Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Basic Energy Services, Inc Popped Today

By Travis Hoium – Feb 20, 2014 at 4:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful or just another movement?

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 drilling service contractor Basic Energy Services, Inc (BASX) jumped 16% after the company reported earnings.

So what: Fourth-quarter revenue was up 2%, to $308.0 million, in line with what analysts expected. It still reported a loss of $7.4 million, or $0.18 per share, but that was $0.08 better than estimates, so that's what investors liked today. 

Now what: Rigs count was basically flat last year, and that didn't help Basic Energy Services' operations last year. Losses are actually growing, which isn't a good sign for any company, especially one that investors expect to swing to a profit at the end of 2014. This stock is just too high a risk for me today, and I'd wait for operations to turn around before jumping in.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Stocks Mentioned

Basic Energy Services, Inc. Stock Quote
Basic Energy Services, Inc.
BASX
(%)

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.