How To Play Key Energy Services, Inc. (KEG), LiveDeal Inc (LIVE), And Seventy Seven Energy Inc (SSE)?
New York, NY – GDP INSIDER – 01/02/2014.
Investors are increasingly getting concerned about Key Energy Services, Inc. (NYSE:KEG). The company’s performance in 2014 was bad to say the least. The stock price declined and the company could not deliver the expected revenue and bottom line performance. However, 2015 is already shaping up to be a challenging year as oil prices continue to plummet.
Things in the oil market are not made better by the defiance of OPEC to cut production, yet the U.S. shale production is on the increase. Analysts at Global Hunter Securities recently downgraded their rating on Key Energy Services, Inc. (NYSE:KEG) and also cut their target price on it. The bearish move was motivated by the growing price challenge environment for oil companies.
Key Energy Services, Inc. (NYSE:KEG) generated $365.8 million in revenue and posted $83.3 million in operating loss in the most recent quarter. Revenue fell short of the consensus estimate.
A recent statement by LiveDeal Inc (NASDAQ:LIVE)’s CEO that they were keen to expand into full e-commerce operation is certainly an ambitious dream. However, another look at the statement reveals that such a move could see the company set itself up for greater competition than what it has already known.
So far, serving a niche market with live and instant deals has had a profound benefit in LiveDeal Inc (NASDAQ:LIVE)’s financial performance. For example, the company recently revealed that its fiscal 2014 net revenue grew 209% to $7.2 million compared with net revenue in 2013. Additionally, gross profit jumped 42% and cash increased significantly to $8.1 million at the end of the fiscal year.
While venturing into full e-commerce is expected to lead to a bigger growth in the company, there will also be new costs and expenses to meet in the highly competitive e-commerce sector. However, as usual, we will wait to see how LiveDeal Inc (NASDAQ:LIVE) navigates its way into full-fledged e-commerce.
Seventy Seven Energy Inc (NYSE:SSE) presents an interesting energy play. The spinoff from Chesapeake Energy Corporation (NYSE:CHK) operates in high-potential U.S. shale locations, which interesting for its revenue story.
However, Seventy Seven Energy Inc (NYSE:SSE) still needs to address its cost and expenses issues to improve bottom line and preserve cash. The company revealed that its gross profit in the most recent quarter fell to $134.63 million from $243 million in the previous one. Nonetheless, the company has greater opportunity to grow independently from Chesapeake following the spinoff.
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