Below is a brief note written by CEO Keith McCullough:
Energy Stocks continue to be a horrible place to be as the Commodities market prices in a #FullCycleInvesting Strong Dollar during Quad 4 in Q319.
One of our favorite Institutional Research Best SELL Ideas in Energy remains Apergy (APY). Here's a summary excerpt from our Energy analyst Al Richard's note post the recent quarter:
Takeaway: 2Q19 results soften YoY while the operating environment continues to deteriorate and the competitive set intensifies. Fair value = $20 - $25 / share. Short APY is a Hedgeye Energy Best Idea.
On the 2Q19 Results…… Revenue of $306MM came in below consensus estimates of $311MM. EBITDA of $75MM, after adjusting for a ~$3MM impairment & restructuring charge, was in-line with consensus and declined 3% YoY. Production & Automation Technology segment revenue declined 2% YoY while EBITDA declined 5% YoY on lower revenue and higher input costs. Drilling Technologies revenue declined 9% sequentially due to lower drilling activity and seasonal weakness in Canada. Segment EBITDA declined 9% due to lower revenue, while margins remained flat at 38% which the company attributed to cost and productivity initiatives.
Sell the bounce to lower-highs,