|Written by GSCR Staff|
|Monday, 11 February 2013 12:42|
Energy Services Star
About a month ago we highlighted Heckman Corporation (NYSE – HEK - $4.05) as a natural gas services play. The stock is down a little today, but reached $4.35 Friday, up from the $3.91 in our initial coverage.
Why do we bring this up? ION Geophysical Corporation (NASDAQ – IO - $7.38) is poised to make a run after making a change at the top to new chairman James “Jay” Lapeyre Jr.
The Company provides geophysical technology, services, and solutions for the oil and gas industry internationally. It operates through four segments: Solutions, Systems, Software, and INOVA Geophysical. These four segments constitute a focus on marine and land products and services in oil and gas discovery in advanced acquisition equipment, software and planning, and seismic processing services.
Why do we like the stock? First, our technical analysis shows a very bullish indication for the short term. Second, 3Q12 results indicated an increase in revenue for all segments listed above highlighted by close to a 29% increase in revenue overall from 2Q12. Finally, the Solutions segment ended 3Q12 with a record backlog of $199 million, which is a super indication for future sales.
IO continues to innovate in the space, which is critical as its customer base seeks more efficient and cost effective means for discovery. Look for the stock to run especially if 4Q12 numbers are good up to the $8.50 range.
Have a great day.
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
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