Dj Holder Scf-Vii(A) Lp Registers 428732 Of Nine Energy Service Inc >Nine

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.

Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase, investors find themselves invested in shares that have limited to no upside or even a downside. So, betting on a stock just by looking at the traditional momentum parameters could be risky at times.

A safer approach could be investing in bargain stocks with recent price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify great momentum stocks by paying close attention to trends in a stock's price or earnings, our 'Fast-Paced Momentum at a Bargain' screen comes handy in spotting fast-moving stocks that are still attractively priced.

There are several stocks that currently pass through the screen and Nine Energy Service (NINE) is one of them. Here are the key reasons why this stock is a great candidate.

Investors' growing interest in a stock is reflected in its recent price increase. A price change of 25.2% over the past four weeks positions the stock of this oilfield services company well in this regard.

While any stock can see a spike in price for a short period, it takes a real momentum player to deliver positive returns for a longer time frame. NINE meets this criterion too, as the stock gained 17.1% over the past 12 weeks.

Moreover, the momentum for NINE is fast paced, as the stock currently has a beta of 3.31. This indicates that the stock moves 231% higher than the market in either direction.

Given this price performance, it is no surprise that NINE has a Momentum Score of A, which indicates that this is the right time to enter the stock to take advantage of the momentum with the highest probability of success.

In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped NINE earn a Zacks Rank #2 (Buy). Our research shows that the momentum-effect is quite strong among Zacks Rank #1 and #2 stocks. That's because as covering analysts raise their earnings estimates for a stock, more and more investors take an interest in it, helping its price race to keep up. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here

Most importantly, despite possessing fast-paced momentum features, NINE is trading at a reasonable valuation. In terms of Price-to-Sales ratio, which is considered as one of the best valuation metrics, the stock looks quite cheap now. NINE is currently trading at 0.11 times its sales. In other words, investors need to pay only 11 cents for each dollar of sales.

So, NINE appears to have plenty of room to run, and that too at a fast pace.

In addition to NINE, there are several other stocks that currently pass through our 'Fast-Paced Momentum at a Bargain' screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.

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The Colombian division of Petrobras S.A. PBR, Petrobras International Braspetro BV,and the country’s state-owned energy giant, Ecopetrol S.A. EC, have finally received a favorable ruling from the Santa Marta Tribunal to continue with drilling and operational activities in the Tayrona drilling area after a previous setback from the Fourth Labor Court of the Santa Marta Circuit. Previously, the labor court had ruled to halt operations at the Sirius-2 well due to issues raised by the Indigenous Community of Taganga. This reversal of order marks a noteworthy step as the project aims to address Colombia’s alarming natural gas shortage.

Court Decision Eases PBR, EC and Colombia’s Energy Future

PBR and EC had earlier estimated that the Guajira offshore basin had 6 trillion cubic feet (tcf) of natural gas reserves and the discovery could have important implications for the declining gas supply of Colombia. Petrobras will act as an operator in the project with a 44.44% stake, partnering with Ecopetrol, holding a 55.56% stake. Both companies are focused on determining the commercial viability of the project and are viewing it as a critical resource to meet Colombia’s future energy needs.

Indigenous Consultation

The tribunal has further instructed the Ministry of the Interior to reassess within one month if any formal consultation is required with the Indigenous communities. This step will take care of the demands of the local communities and meet the energy goals of the country at the same time. The court approval allows the companies to carry on their activities in the Tayrona area, but concerning the local communities and the environment.

PBR and EC’s Zacks Rank and Key Picks

Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. As part of its diversification strategy, the company has been working on multiple projects in South Africa.

The Colombia-based petroleum company, Ecopetrol S.A., is focused on identifying opportunities within the eastern Llanos Basin of Colombia, as well as in other areas in Colombia and northern Peru.

Currently, both companies have a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Smart Sand, Inc. SND and Nine Energy Service, Inc. NINE.While Smart Sand currently sports a Zacks Rank #1 (Strong Buy), Nine Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Smart Sand produces northern white raw frac sand for the oil and gas industry. It offers proppant and related logistics services for oil and gas recovery from unconventional wells. SND’s expected EPS (earnings per share) growth rate for the next quarter is 125%, which compares favorably with the industry's growth rate of 13.68%.

Nine Energy Service, Inc. provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS (earnings per share) growth rate for the next year is 35.77%, which compares favorably with the industry's growth rate of 19.80%.

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Following the planned acquisition of Marathon Oil Corporation MRO in the recent past by ConocoPhillips COP, the former has now announced a major layoff from its Houston facility affecting about 500 employees. The company has filed a Worker Adjustment & Retraining Notification with the Texas Workforce Commission.

The company further indicated that the job status of the affected employees would be notified within a month of the close of the merger. While some of the employees will be retrained for transition roles, most are set to face permanent job losses. Although the scope and duration of transition roles are still being defined, more than half are expected to extend beyond six months.

Details of COP’s $22.5B Acquisition of MRO

ConocoPhillips, in May 2024, announced an accord with Marathon Oil to acquire it in an all-stock transaction valued at $22.5 billion. The deal, expected to close in the fourth quarter of 2024, will add to COP’s extensive unconventional oil portfolio. The acquisition will add a high-quality inventory at a low cost and help the company achieve its financial and operational goals. The deal is expected to become attractive for shareholders as it is anticipated to enhance earnings, cash flows and per-share distributions.

Transition and Synergy

Although the merger is a strategic move for the company to expand its portfolio and streamline its operations, it is challenging for the employees who are about to face layoffs. Both companies share similar values focused on safe operations and long-term shareholder value; therefore, the merger would improve performance and reduce operating costs.

MRO and COP’s Zacks Rank and Key Picks

Houston, TX-based Marathon Oil Corporation is a leading oil and natural gas exploration and production company with operations in the United States and Africa. Currently, MRO has a Zacks Rank #4 (Sell).

Headquartered in Houston, TX, ConocoPhillips is involved in the exploration and production of oil and natural gas. Currently, COP has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Smart Sand, Inc. SND and Nine Energy Service, Inc. NINE.While Smart Sand currently sports a Zacks Rank #1 (Strong Buy), Nine Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Smart Sand produces northern white raw frac sand for the oil and gas industry. It offers proppant and related logistics services for oil and gas recovery from unconventional wells. SND’s expected EPS (earnings per share) growth rate for the next quarter is 125%, which compares favorably with the industry's growth rate of 13.68%.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS growth rate for the next year is 35.77%, which compares favorably with the industry's growth rate of 19.80%.

Zacks Investment Research

Chevron Corporation CVX has entered into a major deal with Challenger Energy Group to acquire 60% of the stakes in the AREA OFF-1 block through its wholly-owned subsidiary, Chevron Uruguay Exploration.

An Insight Into CVX’s Deal

The deal marks a milestone for CVX as it is set to become the operator of the AREA OFF-1 block, located about 100 km off Uruguay’s coast. Per the agreement, CVX will hold a 60% stake in the block, with Challenger retaining the remaining 40% non-operating interest.

The cost of the acquisition includes a cash payment of $12.5 million and CVX assuming the entire share of Challenger’s costs in connection with a 3D seismic campaign on AREA OFF-1 up to a maximum of $15 million. CVX will also bear 50% of Challenger’s share of cost up to a maximum of $20 million if it decides to drill an exploration well in the said block.

This acquisition, which has received all the required approvals from the Uruguayan regulatory authorities, will ensure that Challenger is fully funded for its prospects. It will also solidify its position in securing early access and progressing the exploration blocks through high-quality technical work.

What Lies Ahead for CVX and Challenger?

CVX and Challenger are under discussion regarding their 3D seismic campaign, which is expected to begin in the first half of 2025, covering about 14,557 km2.

Since the divestment and other work-related operations of AREA OFF-1 are already in their final stages, Challenger is planning to advance with its AREA OFF-3 technical work program. Challenger aims to deploy the insights it gains from the initial block’s technical work in the AREA OFF-3 block and plans to farm out the second block by mid-2025.

CVX’s Zacks Rank and Key Picks

The U.S. energy major Chevron is one of the world’s largest publicly traded oil and gas companies with operations that span almost every corner of the globe. However, the company is grappling with high sensitivity to oil price fluctuations and relatively expensive valuation.

Currently, CVX has a Zacks Rank #5 (Strong Sell).

Investors interested in the energy sector might look at some better-ranked stocks like Smart Sand, Inc. SND, Nine Energy Service, Inc. NINE and Talos Energy Inc. TALO. While Smart Sand currently sports a Zacks Rank #1 (Strong Buy), Nine Energy and Talos Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Smart Sand produces northern white raw frac sand for the oil and gas industry. It offers proppant and related logistics services for oil and gas recovery from unconventional wells. SND’s expected EPS (earnings per share) growth rate for the next quarter is 125%, which compares favorably with the industry's growth rate of 17.41%.

Nine Energy Service, Inc. provides onshore completion and production services for unconventional oil and gas resource development. NINE’s expected EPS (earnings per share) growth rate for the current quarter is 23.08%, which compares favorably with the industry's growth rate of 2.90%.

Talos Energy Inc. engages in exploration, development and production of oil and natural gas properties. Talos’ expected EPS (earnings per share) growth rate for the next quarter is 600%, which compares favorably with the industry's growth rate of -38.58%.

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