Jim Cramer on Tesla and Other Stocks

10. Baker Hughes Company (NASDAQ:BKR)

Number of Hedge Fund Holders: 41

Cramer noted that Baker Hughes Company (NASDAQ:BKR) stock has increased by almost 8% in the year, which is an improvement, but it still significantly trails behind the overall market. Here’s what he had to say:

“Well, this one’s a shocker. I’ve steered you away from this one in the past ‘cause I saw Baker Hughes as an inferior operator compared to SLB or Halliburton but maybe, maybe it’s time to rethink that stance. This stock’s been performing quite well since former parent company GE sold off its remaining stake in the business, it was back in 2022.

While SLB and Halliburton put in a relative peak last fall and have been falling steadily, since Baker Hughes has managed to keep grinding higher, you have to wonder how did they do that. Simple, unlike SLB and Halliburton, Baker Hughes is not a pure play oil service company. That’s only 60% of the business, the other 40% comes from their industrial and energy technology division which has lots of high-tech energy related products, including natural gas equipment and clean energy.

While the oil service business grew at a 3% rate in the first 9 months of the year, not great, the industrial and energy technology segment was up nearly 20%, that is great. On Tuesday night, Baker Hughes reported and though they had a very big revenue miss, their earnings still came in 6 cents better than expected. Just keep in mind that Baker Hughes is not winning because it’s a better oil service company than SLB or Halliburton, it’s winning because it’s less of an oil service company at a time when that business has just been treading water.”

Baker Hughes (NASDAQ:BKR) offers a wide range of technologies and services to the global energy and industrial sectors. The company designs and manufactures products for various oilfield operations, including exploration, production, and decommissioning, while also providing equipment and solutions for gas technology and energy applications.

In its third-quarter earnings report released on October 22, Baker Hughes (NASDAQ:BKR) highlighted an increase in revenue, largely attributed to its Industrial & Energy Technology (IET) segment. The company secured orders totaling $6.7 billion, which included $2.9 billion from the IET segment, marking the eighth consecutive quarter where orders reached or exceeded this level. Adjusted EBITDA for the quarter was reported at $1,208 million, which was a 23% increase year-over-year, while free cash flow reached $754 million.