For the last several years, Weatherford hasn’t gotten a lot of love and affection from the investor community, but we see positive things happening in many of the company’s markets.
The chart below is our firm’s trademarked SPEARS RENTAL & FISHING MARKET INDEX, an index that tracks the quarterly revenues of all the public rental & fishing service companies around the world – WFT, SPN, Civeo, SLB and many more, but Weatherford is the largest by far. In Q1 2013, the Index was launched, equaling “1.00” that quarter.
Spears RENTAL & FISHING Market Index
In 2013 and 2014 the global market for rental & fishing was flat while oil prices hovered around $100. Like every other market, rentals spiked in the last half of 2014 before collapsing and collapsing and collapsing for 7 straight quarters, falling 70% from the peak.
But this market has been on a slow, steady increase for the last 5 quarters and, in Q1 2018, will add a 6th quarter of steady growth. It is a long way from the peak, but when this sector is busy, it is very profitable. No new equipment is required today, so no CAPEX needs to be added to the sector for the sector to grow.
If we were tracking just the US, the index would be far closer to the 2014 peak. This can be quite a nice industry for a well-run company. Maybe it's time to go fishing.