Oilfield service (OFS) companies have lost their luster, given the malaise that hangs over the oilfield service space at the present. Quite simply, the OFS space needs a catalyst to give investors confidence in its ability to generate profits.
There is no question that these companies are oversold at current levels. But it's hard to get excited about the OFS space when they tell us (as they do) that no increases in business are expected before the second half of the year. That said, I think there are several drivers emerging for Baker Hughes General Electric, NYSE: BHGE, to post increased profits and cash flow.
It is worth noting that we are well on the way to the second half of the year, so we should begin to see some improvement when Q-2 numbers are announced. So, let's take a look at several long term theses that might change the trajectory of Baker Hughes stock.LNG plant constructionGrowth in the subsea tree marketDigitalization of oilfield data managementElectrification of frac pumps in the Permian
The Growth Thesis for LNG
This is the strongest short term hydrocarbon thesis out there; in part, because it is the one form of hydrocarbon energy the “Greens” will haltingly accept in their view of the future's energy mix.
The great truth that drives this market is some of our planet's most populous nations lack the energy resources to meet the demands of their economies. These countries all have mandates to clean up their air, while…