Nautilus, Inc. (NLS), Safe Bulkers, Inc. (SB), Weatherford International Ltd (WFT): Three Stocks Enjoying Stubborn Buying

Weatherford International

The odd one out of the three with last year’s heavy second-quarter loss, which has ultimately skewed the earnings for the trailing 12 months. The stock operates within the oil and natural gas sector, providing equipment and services to companies in the sector. Within the Energy sector, I have covered the likes of Chesapeake Energy Corporation (NYSE:CHK), and Atlas Pipeline, both having struggled to participate in the gains enjoyed the broader market. Weatherford International Ltd (NYSE:WFT) is itself in the process of emerging from a two-year downward trend, but buyers look ready to accept its weak earnings and await for the ship to slowly turn.

First quarter revenue of $3.8 billion was down 5%, sequentially, but up 7% on same period last year; although North America was down 4% year-on-year. Regionally, Latin America performed better than expected, with margins at the highest levels for the past four years. Middle East, North Africa and Asia-Pacific performance beat what was expected to be seasonal lows, while Europe, Russia, Caspian and SSA were as expected. Losses for legacy Iraq contracts went from $64 million in the fourth quarter to just $8 million in the first quarter of 2013, with no plans for further capital investment in the region. The company retired some $294 million in debt, but entered into a credit agreement to obtain some “short-term liquidity,” although the company expects to continue to retire its debt (which totals $8.9 billion). The company is on target to meet its expected $600 million free cash flow from operations in 2013.

Projections are for a better for the second quarter, with of $0.16-0.18 earnings per share, although this is still at the low end of its historical range. North Africa is unlikely to return to ‘norms” until 2014. Optimism can be taken from the improved performance of its rivals: Halliburton Company (NYSE:HAL) last beat EPS estimates by a dime, while Schlumberger added 2 cents to its estimates.

Summary

All three stocks made their volume move in recent weeks, and more importantly, held on to those gains. The fundamental story of each is different, but the net result for higher stock prices should not be too unreasonable.

The article 3 Stocks Enjoying Stubborn Buying originally appeared on Fool.com and is written by Declan Fallon.

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