This article was first published by Seeking Alpha on March 27, 2015.
By Sarfaraz A. Khan
The oilfield services company Frank's International (NYSE:FI) is a fairly unknown stock. The company is one of the oldest names in the energy sector, yet it barely gets any coverage in the financial media. This stock, however, could be an interesting pick for energy investors who have been bottom-picking some high-quality names during the ongoing downturn.
Frank's International debuted at the New York Stock Exchange in 2013 but it has been operating as a family business since 1938. Keith Mosing, whose grandfather built Frank's International, now sits as the executive chairman. The company provides variety of tubular services to exploration and production companies all over the world. Frank's International, together with Weatherford International (NYSE:WFT), forms the duopoly in the global tubular services market. Last year, Frank's generated nearly half of its total revenues and EBITDA from outside the U.S. while ~75% of its services revenues - that represent 84% of its total revenues - came from offshore projects.
Last year, Frank's reported 7% increase in revenues and 2.5% increase in adjusted earnings to record levels of $1.15 billion and $450 million respectively. Frank's runs a free cash flow positive business, meaning the company generates more cash from operations than what it spends on expanding its asset base. Last year, Frank's generated $368.8 million as cash flows from operations while its capital expenses came in at $172.9 million. This translated into free cash flows of $196 million, up from $93 million in 2013.