10 Best Oil and Gas Penny Stocks To Buy

05. Oil States International, Inc. (NYSE:OIS)

Number of Hedge Fund Holders: 22

Share Price: $4.58

Oil States International, Inc. (NYSE:OIS) is a diversified provider of capital equipment and engineered products catering to the energy, industrial, and military sectors worldwide. The company operates through three primary segments: Well Site Services, Downhole Technologies, and Offshore/Manufactured Products. Each segment provides specialized offerings that support drilling, completion, and production activities in the oil and gas sector, along with other industries such as industrial and military.

The company recently announced its Q2 2024 earnings, showcasing strong performance across its segments. Oil States International, Inc. (NYSE:OIS) beat analyst expectations with an EPS of $0.07, surpassing the anticipated $0.035. This achievement was driven by increased demand for subsea and production systems, particularly in offshore basins. The company’s consolidated revenues increased by 11% sequentially, while adjusted EBITDA saw a robust growth of 38%, reflecting improved operational efficiencies and higher project completions.

The Offshore/Manufactured Products segment was a key contributor to these results, with a 17% sequential increase in revenues, totaling $102 million. Adjusted segment EBITDA rose by 27%, benefiting from a backlog of $300 million as of June 30, 2024, and a strong quarterly book-to-bill ratio of 1.0. The Well Site Services segment, despite a 2% sequential decline in revenues due to lower U.S. land activity, reported a 30% sequential increase in adjusted segment EBITDA, supported by the strategic optimization and exit of underperforming locations. Additionally, the Downhole Technologies segment reported a 16% increase in revenues and a 42% growth in adjusted segment EBITDA sequentially, driven by stronger international sales.

In Q2 2024, Oil States International, Inc. (NYSE:OIS) generated $10 million in cash flows from operations, reflecting a strong liquidity position. The company used these funds to repurchase convertible debt and buy back common stock, demonstrating a commitment to enhancing shareholder value. Its gross debt to EBITDA ratio stands at 1.5x, and net debt to EBITDA ratio is 1.2x, providing significant financial flexibility.

Hedge fund interest in the company decreased slightly, with 22 hedge funds holding stakes in Q2 2024, compared to 26 in the previous quarter. Overall, with stable oil prices, strong demand for its products, and strategic cost management, Oil States International, Inc. (NYSE:OIS) is well-positioned for future growth.