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5 Reasons to Add TETRA Technologies (TTI) to Your Portfolio


Estimates for TETRA Technologies, Inc. TTI have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2018 earnings has moved up 16.7% to 7 cents.

Also, the Zacks Consensus Estimate for earnings for 2018 and 2019 reflects year-over-year surge of 133.3% and 199.2%, respectively.

TETRA Technologies is a geographically diversified oil and gas services company focused on completion fluids and associated products and service. It comprises three divisions — Water & Flowback Services, Completion Fluids & Product, and Compression.

Let’s focus on the factors that make TETRA Technologies an attractive stock now.

Price Appreciation: The Zacks Rank #2 (Buy) stock has gained 42.9% in a year against the industry’s decline of 11%.

VGM Score: The stock has a favorable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with an impressive VGM Score of A or B coupled with a top Zacks Rank offer the best investment bets.

Earnings Results & Surprise History: The company reported earnings of 3 cents per share in second-quarter 2018, which beat the Zacks Consensus Estimate of a penny by 200%. TETRA Technologies has an impressive earnings surprise history. Its earnings surpassed the consensus estimate in three of the last four reported quarters, the average being 106.25%.

Capex Plans: The company plans to incur a growth capital investment in the range of $100-$121 million and a maintenance capex of nearly $27-$34 million in 2018. The capital expenditure will be incurred majorly for expansion of the water business, adding compression equipment with 115,000 horsepower capacity and for enhancing aftermarket services to its customers.

Strong Backlog: The company fabrication equipment backlog for third-party sale remained strong in first-half 2018 with more than $100 million as the company continues to receive strong orders. Also, at the end of June, the backlog went up to $120 million on account of additional $80 million order received from a large midstream operator in the Permian Basin, the shipment of which will begin in early 2019. The company anticipates strong demand for its products, which is expected to boost top-line performance of the company.

Other Stocks to Consider

Some other top-ranked stocks from the same space are Newpark Resources, Inc. NR, Unit Corporation UNT, and Subsea 7 S.A. SUBCY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Newpark Resources pulled off an average quarter positive surprise of 36.91% in the last four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 2.4% in the past 60 days to 42 cents.

Unit Corporation pulled off an average quarter positive surprise of 12.73% in the last four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 4.9% in the past 60 days to 86 cents.

Subsea pulled off an average quarter positive surprise of 318.55% in the last four quarters. The Zacks Consensus Estimate for 2018 EPS moved up 66.7% in the past 60 days to 55 cents.

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