WHD - Cactus Corrects Course But Energy Market Concerns Remain

2024-03-10 07:13:54 ET

Summary

• WHD faces uncertainty in the energy market due to falling natural gas prices and potential rig reductions.
• The company has rolled out modified frac valves, leading to increased potential demand and encouraging prospects.
• WHD's cash flows and balance sheet remain strong, making it a reasonable investment for moderate medium-term returns.

WHD Stays On The Balance

In my previous article on September 13, 2023, I discussed Cactus, Inc.'s ( WHD ) business and strategies. Due to the precipitous fall in natural gas prices, WHD faces a relatively uncertain energy market environment. The upstream operators will likely respond with rig reductions, which may weaken the company's near-term outlook. It has also deferred its investments in the Middle East to lower costs and protect the margin. I think its outlook on the margin front has improved since my last article, although the topline remains slippery....

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