Oil & Gas Stocks: Year in Review
Suffice it to say, if you're not yet confused, good. But understand, while each of these oil and gas company types serve a slightly different market, one thing they do have in common is that each of these industries will end 2013 on a high note for the year. This is unlike, say, the coal industry.
While it's encouraging to see the increase in customer orders and backlogs, some of these names are still working to overcome weak oil prices and soft rig counts.
I have to wonder how much faith the Street is willing to place in oil and gas in 2014. For example, Cameron International
Transocean posted a 5% year-over-year revenue increase in its most recent quarter. Yet its stock has stagnated anyway. Not only did the company beat estimates by $90 million, but Transocean's performance more than doubled that of National Oilwell Varco
Essentially, 2013 became a year where the Street was divided on the metrics it chooses to care about it, at least in this sector.
Now I'm not suggesting that there aren't any poorly performing companies in this industry, especially from an operational perspective. But in the case of Cameron and Anadarko, investors made the mistake of believing that certain details like revenue and gross margins are the driving forces of the stocks. To cite these metrics in bearish arguments doesn't make sense.
What's really important to remember is that this entire sector is driven by higher volume of orders.