The following
is a small-cap insight column written for Seeking Alpha on a company with a
market cap of $2.4 billion.
Forum Energy Technologies (NYSE:FET) is
an oilfield products company that has not delivered an impressive performance
so far but the bigger picture on the macro environment and a deeper look into
the company’s operations reveals that this company could be poised for
significant growth in the long run.
Houston-based Forum
Energy Technologies (FET) is an oilfield products company
which designs and manufactures products, as well as provides related services,
for drilling, subsea, production, completion and infrastructure segments of the
oil and gas industry. The company's competitive advantage lies in the diversity
of its product portfolio. It has reported modest revenue growth and a drop in
operating income in the first nine months of the current year. However, a
closer look at this relatively young corporation reveals that it could be
poised for long-term growth.
What is
Forum Energy Technologies?
Broadly
speaking, Forum Energy makes two kinds of products; the consumable
products that are frequently replaced items consumed during
exploration, development, production and transportation of oil and natural gas,
and highly engineered capital products that are designed for
projects involving; new rig installation, upgrade or refurbishment; subsea
construction and development; development of new producing wells; and
downstream projects. More than 50% of the company's revenue comes from
consumables while the rest comes mainly from the capital products.
These
products are then divided into two segments; the drilling & subsea
segment (D&S), through which the company provides products and services
to subsea, drilling, well construction completion and intervention markets; and
the production & infrastructure (P&I) segments through
which Forum Energy serves the well stimulation, completion, production and
infrastructure markets. Historically, over the last three years, Forum Energy
has earned around 60% of its revenues from the D&S segment and nearly 40%
of its revenues from the P&I segment. .... read full article at Seeking Alpha
