Forum Energy Technologies versus peers and industry
Forum Energy Technologies (FET) is a Texas-based oilfield equipment and services (or OFS) company. It supplies products and services related to rig aftermarket activities, rig parts, and related fields. On May 16, Forum Energy Technologies was trading at $16.18, up 30% from its price at the beginning of 2016.
The VanEck Vectors Oil Services ETF (OIH) has risen 2.4% year-to-date. Precision Drilling (PDS), FET’s smaller market cap peer, has risen 11% during the same period. The entire OFS industry has been negatively affected by the energy price crash since June 2014. However, since the beginning of this year, crude oil prices have recovered ~31%.
What does FET’s share price movement tell us?
Forum Energy Technologies’ share price began trending down beginning in May 2015. FET’s quarterly revenues and earnings have deteriorated in the past four quarters due to energy price depression and weak demand for OFS products and services. However, its cash flows from operations showed some degree of resilience. FET’s share price has gathered some steam since the beginning of February.
Forum Energy Technologies’ moving averages
On May 16, Forum Energy Technologies’ share price was at a 14.3% premium to its 50-day moving average (or DMA). It’s trading 22.3% above its 200-day moving average. FET makes up 0.06% of the iShares Russell 2000 ETF (IWM). The energy sector makes up 2.8% of IWM.
A 50 DMA is a short-term moving average while a 200 DMA shows a long-term trend. FET’s share price has run ahead of its short-run moving average since the last week of February, indicating relative strength in FET’s share price. FET’s short-run MA has also crossed over the long-run MA in May. This indicates bullishness in FET’s share price.
We’ll discuss Forum Energy Technologies’ top-line and bottom-line growth, its balance sheet, and its valuation multiples in this series. We’ll start by analyzing management comments in the next part.