PTEN: Undervalued by the market?

[dan_s]

Patterson-UTI Energy Inc. (PTEN): Provides onshore contract drilling services to oil and natural gas operators. Market cap of $2.91B. Earnings to be announced on 02/02. Of the 23 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a current upside of 18.85% from current levels around $18.51. The stock is currently stuck in a downtrend, trading 7.56% below its SMA20, 8.74% below its SMA50, and 24.82% below its SMA200. The stock has lost 8.24% over the last year.

http://seekingalpha.com/article/321879- ... urce=yahoo

[setliff]

pten is in process of bottoming. imo. 1st hr this am there was a hell of a battle between the bulls and bears re pten.

price varied from 17.80 to 18.20.

volume soared with ~ 2m shs 1st hr. bulls won with it up 83c now with vol >5m shs.

[dan_s]

PTEN is trading at just 3.2 X 2011 CFPS. Compare to HP that is trading at 8.9 X 2011 CFPS.

Granted, HP deserves a premium since it has a higher quality rig fleet and more rigs under long-term contract. But not this much.

Unless there is a huge drop in PTEN's pressure pumping business, which I don't see happening, this stock is very cheap compared to its fundamentals.

A small-cap driller that looks very interesting is UDRL. They recently sold a bunch of their low HP rigs and they should have very strong Q4 results.