These energy services companies have the right business focuses: Analyst
The energy sector is experiencing volatile commodity prices but well-managed companies with disciplined spending should navigate the uncertainty well, according to at least one expert.
Waqar Syed, managing director of energy technology and services and head of research at ATB Capital Markets, told BNN Bloomberg in an interview on Friday that energy service fundamentals tend to follow long-term projects and are not as impacted by day-to-day price volatility.
He added that several well-managed stocks in this sector will not fall victim to an energy boom-and-bust cycle seen in the past.
“The management of typical energy services companies have become very disciplined relative to what you saw in previous cycles,” he said. “They have very disciplined management teams, very disciplined capital spending, very disciplined investments in services and supply.”
He recommended TechnipFMC (FTI NYSE), Trican Well Service (TCW TSX), Ensign Energy Services (ESI TSX) as his top three stock picks within the energy services space.
Syed, his family, his firm and his investment banking clients do not own any shares in the stocks mentioned above
For the full interview, click on the video at the top of this article.