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Fracking Stocks To Buy 2017

Hydraulic fracturing, or fracking, involves pumping water, sand, and chemicals under high pressure down a wellbore to fracture rocks underneath the surface so oil and gas can more freely flow out the of well. The process has been around since 1947 when Haliburton performed the first fracking operation in Kansas. However, it grew in importance (and notoriety) once drillers combined it with horizontal drilling to form a game-changing combination that has helped the U.S. unlock its vast shale resources.

fracking stocks to buy 2017

Drillers have gotten so good at fracking that they've unleashed a gusher of oil and gas production in recent years, which has flooded the market and pushed down prices. Because of that, shale drilling activities have slowed, which has hit fracking stocks hard. That said, those falling prices have fueled more demand for oil and gas, which when combined with tepid supply growth, has started pushing prices higher. This rebound should drive up drilling activity levels in the coming year, which would fuel higher profits for the companies that do the actual fracking, likely taking their stock prices with it (especially given how far they've fallen in the past few years). While there are plenty of fracking stocks, three top options to consider given their strong market positions are:

While Halliburton's revenue has been on the upswing, its stock price has been heading in the opposite direction. Shares have fallen a disappointing 25% this year, mainly because the company expects slower growth in the fourth quarter, with it warning that sales in its drilling and evaluation business would likely fall alongside the rig count. Rivals Schlumberger and Baker Hughes also sounded cautious about results in the near term. Schlumberger, for example, warned that profits in the fourth quarter might not meet analysts' expectations due to weakness in North America. Meanwhile, Baker Hughes called the current business environment "challenging." That said, oil prices have risen since that time, which could cause drillers to spend more money fracking wells next year. While all three companies would benefit from that boost, Halliburton would likely get the most lift since it holds the leading market position.

While C&J Energy Services provides many of the same services as Halliburton, its sole focus is on fracking. Overall, the company is a top-ten fracturing company and holds the leading or second-best market position for several fracking-related services. Meanwhile, it recently bolstered its offerings by agreeing to acquire O-TEX Pumping, which is the fourth largest cementing service provider in the country. It provides a crucial service because cement helps create a strong barrier between a well and rock formations.

As a pure play on fracking, it can be feast or famine for C&J Energy Services. When activity levels dry up, it can have a dramatic impact on the company's bottom line. That was the case during the recent oil market downturn when C&J Energy Services declared bankruptcy. However, it recently reemerged and now has a much stronger financial position, which should enable it to withstand what could be a rocky recovery. That said, as oil producers frack more wells in the coming year, C&J Energy Services will be one of the companies benefiting from that uptick in activity. While it's a higher risk option than Halliburton because of its sole concentration on shale plays in the U.S., that focus gives it more upside as market conditions improve.

One of the main ingredients Halliburton and C&J Energy Services use in fracking wells is sand, which the industry calls a proppant. That's because it helps prop open the tiny fractures in shale rocks, which allows oil and gas to flow out more freely. While several companies supply the industry with sand, one of the leaders is U.S. Silica, which currently operates eight oil and gas sand production plants.

Fracking stocks sold off in 2017 mainly because drillers in the U.S. slowed their pace after oil tumbled into the $40s a few months ago. That said, crude has come roaring back and was recently in the upper-$50s, which should drive drilling activities back up in 2018. That rebound should benefit fracking-focused companies by driving up their revenue and profits, which should eventually spur their stock prices. That's why investors might want to consider buying a top fracking company like Halliburton, C&J Energy Services, and U.S. Silica, since they should have the most upside if that forecast comes to fruition.

ITHACA, N.Y. -- Students from 11 top-tier U.S. business schools will compete in the second MBA Stock Pitch Challenge next Thursday and Friday, April 1 and 2, at Cornell University's Johnson Graduate School of Management.The competition will showcase the stock picking and presentation skills of MBA students who hope to be hired as stock analysts after they graduate. The first-place team will receive a $3,000 award and the second-place team an award of $1,500.The competing teams will conduct their research on Thursday at the school's Parker Center for Investment Research in Sage Hall in the middle of Cornell's campus. The center is a state-of-the-art teaching facility that replicates a Wall Street trading floor and allows students to work with real-time data and the analytical software used by professional fund managers. Final-round presentations on Friday are in B9 Sage Hall at 2 p.m. and are free and open to the public."The Johnson School is hosting the competition because we believe the real-time, experiential focus that stock pitching represents is part of the future of investment management education at business schools," said Charles Lee, the Johnson School professor and expert on stockvaluation who directs the Parker Center. "The new breed of investment analyst must be independent and able to provide strong analysis to back selections, with a full understanding that success comes from the performance of the equity."In addition to the Johnson School, competing teams are from business schools at Indiana University (Kelley), New York University (Stern), Duke University (Fuqua), Massachusetts Institute of Technology (Sloan), Northwestern University (Kellogg), University of Chicago, University of Pennsylvania (Wharton), University of Rochester (Simon), University of Virginia (Darden) and University of Michigan.NYU took the top prize and the Johnson School placed second last year, the first year of the competition, which also took place at the school's Parker Center at Cornell.The teams, each made up of three MBA students, will be assigned a work station and printer in the Parker Center and trained Thursday morning on a variety of analytical tools used by financial institutions and institutional investment firms, among them FactSet, an online investment research service, and Reuters StockVal, an equity analysis and portfolio management tool. On Thursday afternoon they will be given a specific stock and two specific industries from which they are to pick a stock. They will need to decide whether to recommend the assigned stock as a long (buy), neutral (hold) or short (sell) candidate, and the stocks from the assigned industries as either long or short candidates. They have just one evening, until midnight on Thursday, to do extensive research on their stocks and are not permitted to accept outside help.In the real world, such analysis often takes two weeks or longer for a single stock. In addition when they present on Friday to a blue-ribbon panel of judges, the teams are allotted only five minutes to argue for or against investing in the stocks, plus 10 minutes to answer tough questions in the first round and 15 in the second, final round, much tighter time frames than in the real world. The four highest-scoring teams will get to advance to the final round Friday afternoon, and the winning and second-place teams will be announced immediately afterward and posted on this Web site, which also will provide details on the competition: ."Stock analysis and presentation are vital skills for research analysts, and the Johnson School is pleased to provide the forum for the next generation of investment professionals to showcase their talent," said Lee.The judges for the competition are expert analysts and investment managers from both the buy and sell sides of Wall Street equity research. They are: Edmund Debler, portfolio manager, Millennium Partners; Andrew J. Galligan Jr., CFA, director, portfolio manager and analyst (technology and Internet sectors), TimesSquare Capital Management; John Geissinger, chief investment officer, Bear Stearns Asset Management; Judah S. Kraushaar, former sell-side analyst, Merrill Lynch, and a No. 1-ranked Institutional Investor money center bank analyst; Todd Richter, J.D., C.I.C., managing director and head of health-care strategic transaction development, Banc of America Securities LLC.; L. George Rieger, chief investment strategist and co-founder, Hamlin Capital Management, LLC; Steven Tish, portfolio manager (health-care industry), Millennium Partners; and Peter A. Wright, founder, P.A.W. Partners, one of the largest U.S. hedge funds.

As the Ohio Senate rolls out its version of the budget for 2016 and 2017, Senate President Keith Faber tells us that the severance tax on oil and gas production they hoped to include is... read more123456Share This

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