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Hunting - Shares hit by large downgrade

November 2015

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

The de-rating in Hunting’s share price has been more savage than we expected and the shares are now behaving like a geared option on oil price movements. A 56% decline in US oil rig count on the back of a 46% decline in West Texas crude prices provides the backdrop for poor interims, with turnover down 30% to US$463.6m and pretax profit falling 80% to US$20.4m (eps: 8.4 cents). However, net debt, which rose from US$131m to US$167m, mainly due to US$50.8m capital investment, is still relatively low, with gearing (net debt as percentage of shareholders funds) just 12%.Its well construction division, which supplies steel locking threads to connect sections of steel together, saw turnover fall 31% to US$125.5m while profit declin ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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Hunting - Shares hit by large downgrade

November 2015

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