FET - Oil Bulls Should Pay Close Attention To Forum Energy Technologies
2025-04-19 06:17:55 ET
Summary
- Forum Energy Technologies is a global manufacturer of a variety of products used in the oil, gas, industrial, and renewable energy sectors.
- Strong year-over-year performance can be mainly attributed to the Variperm acquisition that took place in January 2024.
- 2025 guidance indicates a mediocre year with declining EBITDA and FCF, but debt repayment could improve future EPS.
- Despite stagnant growth, FET's strong cash flow and focus on the higher margin Artificial Lift and Downhole segment makes it a value play for oil bulls.
Forum Energy Technologies, Inc. ( FET ) is a global manufacturer of products for the oil and gas, industrial and renewable energy industries. It operates two segments - Drilling and Completions and Artificial Lift and Downhole. The former segment sells capital equipment and consumable products used in the drilling process, subsea remotely operated vehicles, hydraulic fracturing pumps, cooling systems, high-pressure flexible hoses and flow iron, wireline cable and coded tubing. The latter segment manufactures and supplies products and solutions for the artificial lift, well construction, production and infrastructure markets. Basically anything to do with the operation of oil wells that the general public has no clue about, FET is involved in it. This is not a business that would be considered a hot and growing market by most investors. But what this company lacks in an engaging story it has in spades with its ability to generate cash flow. This makes it a good value play candidate for investors who are bullish on oil and like the speculative upside potential and volatility of a microcap stock. As one can see, FET has historically been quite volatile, to put it nicely: