Latest news with #ChampionX
Yahoo
10-05-2025
- Business
- Yahoo
ChampionX Corporation (CHX): Among Billionaire Bruce Kovner's Stock Picks with Huge Upside Potential
We recently published a list of Billionaire Bruce Kovner's 10 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where ChampionX Corporation (NASDAQ:CHX) stands against other stock picks with huge upside potential. Bruce Kovner founded Caxton Associates in 1983, a New York-based trading and investment firm that was formed as the successor to Caxton Associates LP. Caxton is a wholly owned subsidiary of Caxton Europe LLP. Kovner retired in 2011, and his firm returned an average of 21% per year between its inception in 1983 and 2011. With his long-time partner Peter D'Angelo in charge of Caxton's operations, Kovner concentrated on trading the financial and commodity markets based on his views of macroeconomic conditions. He is featured in Jack Schwager's book 'Market Wizards' as one of the greatest traders of all time. Here's one of Kovner's popular trading quotes from the book: 'Risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half.' A lot of individuals enter financial markets with the notion that successful investors know something that the common man does not. However, the truth is that experienced investors understand and accept the inherent uncertainty of market outcomes. So they focus on the interplay of probability and the balance between risk and reward. Kovner also believes in the process of adaptation and adjustment. Here's what he had to say about dealing with highly uncertain markets: 'First, I have the ability to imagine configurations of the world different from today and really believe it can happen. I can imagine that soybean prices can double or that the dollar can fall to 100 yen. Second, I stay rational and disciplined under pressure.' Kovner dropped out of Harvard University and floated around a few aimless jobs before finding his love for trading. He also founded the Kovner Foundation, which manages his philanthropic activities. Today, Kovner is chairman of CAM Capital (Caxton Alternative Management Capital), which invests his private assets. Caxton Associates has 13 clients and discretionary assets under management (AUM) of $4.18 billion, according to the firm's Form ADV dated 15 January 2025. The last reported 13F filing for Q4 2024 included $3.18 billion in managed 13F securities and a top 10 holdings concentration of 63.18%. Our Methodology To compile the list of billionaire Bruce Kovner's 10 stock picks with huge upside potential, we sifted through Q4 2024 13F filings of Caxton Associates from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 50 stock picks and ranked the stocks in ascending order of their upside potential. We have also added Caxton Associates' stake in each stock as well as the broader hedge fund sentiment for it. Note: All data was sourced on May 7. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A person wearing protective gear and a respirator, inspecting a corroded pipe in a refinery. Caxton Associates' Stake: $8.19 million Number of Hedge Fund Holders: 48 Average Upside Potential as of May 7: 64.30% ChampionX Corporation (NASDAQ:CHX) provides chemistry solutions, artificial lift systems, and engineered equipment and technologies to oil & gas companies worldwide. It operates in four segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies, and Reservoir Chemical Technologies. ChampionX's Production Chemical Technologies segment generated $523.4 million in Q1 2025 revenue, which was a sequential drop of 8% due to typical seasonal lower international sales volumes. Despite this dip, the segment achieved an operating profit of $82.2 million and an adjusted EBITDA of $109.1 million. The company has already strengthened its arsenal of oil & gas equipment by acquiring RMSpumptools Limited. With the acquisition, ChampionX Corporation (NASDAQ:CHX) gains access to advanced mechanical and electrical solutions for artificial lift applications. This acquisition should open up growth opportunities for the company in the international markets of the Middle East and Latin America. The company has also started a new team focused on unconventional water applications in North America and is re-entering the US Land market with its H2S scavenger program. Overall, CHX ranks 1st on our list of billionaire Bruce Kovner's stock picks with huge upside potential. While we acknowledge the potential of CHX as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CHX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-03-2025
- Business
- Yahoo
Trump's tariffs on steel, aluminum to raise costs for US energy firms, experts say
By Vallari Srivastava (Reuters) -U.S. tariffs on steel and aluminum imports are poised to escalate costs for the oilfield service companies behind North America's vast energy industry, as their operations rely heavily on these metals. Steel is essential for everything from the drilling rigs and pipelines to refineries and storage tanks provided by companies such as ChampionX and Patterson-UTI that supply the equipment and services necessary for oil-and-gas producers. Any tariff hike is a potential hit to the operational and production costs of these businesses, half a dozen industry experts told Reuters. U.S. President Donald Trump's increased tariffs on all steel and aluminum imports took effect earlier on Wednesday "with no exceptions or exemptions", escalating the global trade war. "About 14% of what we buy, it comes from countries that will be impacted by tariffs," said Patterson-UTI CEO Andy Hendricks. "If you layer on tariffs, it could affect us in the low single digits in terms of our costs going up for what we do," Peer ChampionX has also warned of equipment costs going up due to tariffs. A particular variety of steel, hot-rolled coil steel (HRC), is used to fashion oil country tubular goods (OCTG) - specialized pipes and tubes designed to endure high pressures, temperatures and corrosive environments. In 2024, the U.S. imported nearly 40% of its OCTG, according to Wood Mackenzie analyst Nathan Nemeth. By January 2025, Canada and Mexico accounted for 16% of OCTG imports, hinting at buyers stockpiling ahead of potential tariffs. Broadly, U.S. imports of steel products from Canada and Mexico in January rose more than 32% from the previous month to 1,017,644 metric tons, U.S. Census Bureau data showed. Rystad Energy expects tariffs to spike OCTG costs by 15% year-on-year. U.S. prices of HRC are estimated to ascend to $890 per short ton in 2025, marking a 15% increase from the previous year's average price, according to S&P Global Commodity Insights analyst Ali Oktay. "It's probably going to be harder for service companies in 2025 to maintain their activity levels and their pricing," said Mark Chapman, principal analyst for OFS Intelligence at Enverus. Shares of Patterson-UTI and ChampionX have dropped about 16% and 3.3%, respectively, since Trump on February 11 announced plans to hike duties on steel and metal imports. Chapman sees costs rising for Halliburton as well as firms like NOV and Tenaris, key providers of steel pipes to the petroleum industry. While Halliburton and NOV did not respond to requests for comment, Tenaris said it was monitoring the potential impact of tariffs. This price surge will likely be passed on to customers who operate in the exploration and production segment, particularly smaller-scale producers who are more exposed to spot market pricing. "OCTGs represent about 8.5% of drilling and completion costs for onshore wells in the Lower 48 states. So if prices rose by 25%, about 2.1% would be added to well costs," Wood Mackenzie's Nemeth said. Average well costs for producers in the U.S. typically range from $8 million to $9 million. "They're (small-cap producers) at the mercy of the service providers," Chapman said. Large-scale producers such as Exxon Mobil, ConocoPhillips, EOG Resources and Diamondback, with their robust balance sheets and diversified supply chains, are better equipped to absorb these costs. The tariffs come amid plummeting oil prices, the lowest since Russia's invasion of Ukraine disrupted supply chains. Trump's wish to achieve cheaper oil prices and increased production might not align with the profitability of producers. Further, Venture Global, Energy Transfer and Williams Companies all warned in regulatory filings that tariffs could raise project costs, particularly construction costs related to foreign-sourced materials such as steel and aluminum.
Reuters
11-03-2025
- Business
- Reuters
Trump's tariffs on steel, aluminum to raise costs for US energy firms, experts say
March 11 (Reuters) - The proposed U.S. tariffs on steel and aluminum imports are poised to escalate costs for U.S. oilfield services companies, which rely on these metals for their operations. Oilfield services firms such as ChampionX (CHX.O), opens new tab and Patterson-UTI (PTEN.O), opens new tab are the backbone of the North American oil and gas industry, supplying essential equipment and services for drilling, production and maintenance. The lifeblood of this sector - drilling rigs, pipelines, refineries, compressors, storage tanks and offshore platforms - is steel. U.S. President Donald Trump earlier on Tuesday doubled the planned tariffs on Canadian steel and aluminum imports to 50%, to go into effect on Wednesday morning. Any tariff hike is a potential hit to the operational and production costs of these businesses, half a dozen industry experts told Reuters. "About 14% of what we buy, it comes from countries that will be impacted by tariffs," said Patterson-UTI CEO Andy Hendricks. "If you layer on tariffs, it could affect us in the low single digits in terms of our costs going up for what we do," Peer ChampionX has also warned of equipment costs going up due to tariffs. A particular variety of steel, hot-rolled coil steel (HRC), is used to fashion oil country tubular goods (OCTG) - specialized pipes and tubes designed to endure high pressures, temperatures and corrosive environments. In 2024, the U.S. imported nearly 40% of its OCTG, according to Wood Mackenzie analyst Nathan Nemeth. By January 2025, Canada and Mexico accounted for 16% of OCTG imports, hinting at buyers stockpiling ahead of potential tariffs. Broadly, U.S. imports of steel products from Canada and Mexico rose in January more than 32% from the previous month, to 1,017,644 metric tons, U.S. Census Bureau data showed. Rystad Energy forecasts tariffs to spike OCTG costs by 15% year-on-year. U.S. prices of HRC are estimated to ascend to $890 per short ton in 2025, marking a 15% increase from the previous year's average price, according to S&P Global Commodity Insights analyst Ali Oktay. "It's probably going to be harder for service companies in 2025 to maintain their activity levels and their pricing," said Mark Chapman, principal analyst for OFS Intelligence at Enverus. Shares of Patterson-UTI have fallen about 16.5% while ChampionX has dropped 3.3% since February 11, when Trump announced plans to hike duties on steel and metal imports. Chapman sees costs rising for Halliburton (HAL.N), opens new tab as well as firms like NOV (NOV.N), opens new tab and Tenaris ( opens new tab, key providers of steel pipes to the petroleum industry. None of the three firms responded to requests for comment. This price surge will likely be passed on to customers who operate in the exploration and production segment, particularly smaller-scale producers who are more exposed to spot market pricing. "OCTGs represent about 8.5% of drilling and completion costs for onshore wells in the Lower 48 states. So if prices rose by 25%, about 2.1% would be added to well costs," Wood Mackenzie's Nemeth said. Average well costs for producers in the U.S. typically range from $8 million to $9 million. "They're (small-cap producers) at the mercy of the service providers," Chapman said. Large-scale producers such as Exxon Mobil (XOM.N), opens new tab, ConocoPhillips (COP.N), opens new tab, EOG Resources (EOG.N), opens new tab and Diamondback (FANG.O), opens new tab, with their robust balance sheets and diversified supply chains, are better equipped to absorb these costs. The tariff comes amid plummeting oil prices, the lowest since Russia's invasion of Ukraine disrupted supply chains. Trump's wish to achieve cheaper oil prices and increased production might not align with the profitability of producers. Further, Venture Global (VG.N), opens new tab, Energy Transfer (ET.N), opens new tab and Williams Companies (WMB.N), opens new tab all warned in regulatory filings that tariffs could raise project costs, particularly construction costs related to foreign-sourced materials such as steel and aluminum.
Yahoo
03-03-2025
- Business
- Yahoo
Schlumberger: Modestly Undervalued and Growing
S&P 500 member SLB is nearly 100 years old, founded in 1926. Schlumberger Limited (NYSE:SLB) is the New York Stock Exchange listed parent of the SLB group of companies. In 2022 the company changed its brand name to SLB, but the legal name of the listed parent company remains Schlumberger Limited. SLB is the largest of the Big Three oilfield services companies, the other two being Baker Hughes (NASDAQ:BKR) and Halliburton (NYSE:HAL). Warning! GuruFocus has detected 2 Warning Sign with MSFT. 2024 results SLB's pre-tax income grew 7.4% in 2024 to $5.67 billion, following pre-tax income growth of 23.7% in 2023. Diluted earnings per share grew 6.9% in 2024 to $3.11, following 2023's growth in diluted EPS 21.8%. 2024 segment results Digital & Integration pre-tax income grew 12% to $1.4 billion and achieved a pre-tax operating margin of 33.1%. Reservoir Performance pre-tax income grew 15% to $1.5 billion and achieved a pre-tax operating margin of 20.2%. Well Construction pre-tax income fell 4% to $2.8 billion and achieved a pre-tax operating margin of 21.2%. Production Systems pre-tax income grew 52% to $1.9 billion and achieved a pre-tax operating margin of 15.6%. Total Pretax Operating Margin expanded by 0.5% percentage points to 20.2% in 2024. SLB has anAltman Z Score of about 3.3 giving it a safe financial profile. It's also worth noting that SLB has a cool Interactive Analyst Center on the investor relations section of its website. There you can view financial and operational data, build charts and download data into Excel. Why do I like this stock There are several reasons, more than just Donald Trump's Drill, baby, drill! plans which should provide tailwinds for US oilfield services companies. First, GF Value rates the stock as Modestly Undervalued and I agree given the earnings growth I can foresee in this company. SLB is a large player in the Middle East, which is probably the most resilient market in oil and gas. This gives SLB a lot of visibility on earnings, given the Middle East will almost certainly be the last man standing when it comes to oil and gas production given its low cost of production and vast reserves. The Middle East can even be seen as a growth area as countries like Saudi Arabia and the United Arab Emirates look to increase natural gas production. SLB's acquisition of ChampionX (NASDAQ:CHX) adds value through increasing its exposure to specialty chemicals solutions and artificial lift in oilfield services, especially as ChampionX is a leader in the important Permian basin market. Additionally, the deal brings $400 million of annualized pre-tax synergies. The addition of ChampionX will augment our exposure to the production and recovery market, which is an increasing priority for our customers Production chemicals presents an exciting opportunity as an asset-light business that will remain resilient to industry cycles, with nearly every liquid produced globally requiring an element of production chemicals that increases with the age of the asset. Source: Olivier Le Peuch, SLB CEO, at the J.P. Morgan Energy, Power & Renewables Conference, June 2024 SLB is also one of the leaders in subsea and its new business OneSubsea according to SLB's 2024 10-K will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time. OneSubsea comprises of an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities, and strengthened research and development capabilities. SLB owns 70% of this joint venture with Norwegian partners Aker Solutions and Subsea7 owning 20% and 10% respectively. OneSubsea has peer leading margins and is being utilised deeply by major players including an alliance with BP plc (BP) and a strategic collaboration with Equinor ASA (EQNR), ensuring revenue quality. Source: SLB presentation at the J.P. Morgan Energy, Power & Renewables Conference, June 2024 Technology leader SLB calls itself a global technology company which is fair given its Digital business driven by Cloud, AI and Edge revenue growth. SLB's Digital & Integration segment gives the group substantial margin uplift. The core businesses of Reservoir Performance, Well Construction and Production Systems have generally produced pre-tax operating margins of between 10% and 20% over the last four years. Over the same period Digital & Integration has produced an average pre-tax operating margin of 34.2%. While this segment's Asset Performance Solutions is expected to stay roughly flat in terms of revenues in 2025, the digital element offers a lot of growth. Source: SLB presentation at the J.P. Morgan Energy, Power & Renewables Conference, June 2024 That digital element is growing thanks to SLB's proprietary Delfi offering. The Delfi digital platform brings you the world's best apps, AI, data management, and physics-based science for oil and gas exploration, development, drilling, production, midstreamand energy transition solutions. Developed by domain experts for domain experts, it is an open, scalable, and secure, cloud-based software environment with 24/7 operational support. Source: Introduction to Delfi, SLB website The oil and gas industry has long used supercomputers for data analysis, for instance in seismic imaging in exploration. But the industry is ripe to use cloud, AI and edge given the vast amount of data generated across the upstream, midstream and downstream sectors of industry, to squeeze out efficiency gains in operations, maintenance and environmental performance. In the recent Q4 earnings call, SLB announced it had formed strategic partnerships with industry leaders including NVIDIA, Amazon Web Services, and Palo Alto Networks. Finally, and perhaps most importantly, I believe that the company has sustainable competitive advantages in each of its four segments, giving SLB an important moat around its business. Moats The best way to understand SLB's value proposition in Digital is to read its 2022 Investor Day presentation which can be found here. One good example described at the 2022 presentation of Delfi being deployed was the following at Chevron, we are working closely with Microsoft to completely transform their work processes across upstream. One very interesting statistic about Delfi at the same presentation was Our monthly customer retention rate has been above 95 percent for each of the last 12 months. A September 2020 report on digital in energy from Bank of America Global Research noted that SLB's Delfi had a significant first-mover advantage and that software adoption tends to be sticky as switching costs are high. In Reservoir Performance, I came across a recent press release about an Integrated Services Contract award to SLB from Petrobras (PBR), which mentioned a product called Ora, an intelligent wireline formation testing platform. On further research I found that this product won a World Oil Award in 2021 for Best Exploration Technology, saying Ora platform reduces the CO2 footprint by up to 96% by minimizing or eliminating flaring, in addition to decreasing energy consumption by at least 50% on average. These are big numbers to help customers reduce costs. This is a good example of a tool that adds value for customers that appears to be quite unique. In Well Construction, where SLB is the market leader, SLB invented the rotary steerable system, and its autonomous directional drilling is transformative for the industry according to the 2022 Investor Day presentation. SLB's products and services touch more than one-third of the rigs in the US again according to the 2022 Investor Day presentation. By being able to drill more productive wells, SLB can share in the value creation for customers through better pricing. SLB's Production Systems segment helps customers increase oil recovery and minimize the number of wellsneeded. The OneSubsea joint venture sits in this segment and although it competes fiercely with TechnipFMC (FTI) in the subsea business, OneSubsea boasts the largest installed base of subsea trees and last year was awarded a groundbreaking All-Electric Subsea Project contract by Norwegian oil major Equinor which demonstrates OneSubsea's expertise in the important offshore oil and gas trend of electrification of operations. Partnering with Aker Solutions and Subsea7 gives OneSubsea powerful engineering, procurement, construction and installation capabilities. Risks SLB has been in the news a lot in the last year as the Financial Times has written several articles about SLB's continued involvement in Russia. Baker Hughes and Halliburton both exited Russia but SLB has said it had no plans to leave. It was criticised by several campaigners for this but SLB has insisted it is not in breach of sanctions. The stock market is probably amoral, but for me this does highlight a higher risk appetite of the board of SLB, given that this could have possibly annoyed various governments. While my medium to long term outlook for global oil production is for peak and slow decline, and this is certainly a risk for SLB, this is offset somewhat by the probably long-term growing demand for natural gas. The fact that SLB's biggest geographic region is Middle East and Africa, accounting for 36% of revenues in 2024 shows that SLB is less exposed to long-term trends than many other oilfield service providers with lower or no Middle East positions. Governance Given the decision to stay in Russia, I looked into SLB's board of directors. The board is stacked with experienced executives, including former senior employees of the supermajors ExxonMobil (XOM) and TotalEnergies (TTE), and people with vast experience in the energy (including renewables), technology and finance industries, and markets including Russia, India and Argentina. The board has the normal committees plus the New Energy and Innovation Committee, which shows it does have an eye on future markets. Conclusion SLB is a great growth at a reasonable price opportunity. Although the stock has been trending down over the last year and a half, it seems to have found a floor at $40 over the last six months. Its trailing 12 months EV/EBITDA is 8.4x which is nearly 30% below its five year average trailing EV/EBITDA of 11.7x. This discount is odd, given that as the leading oilfield services provider, it is now set to benefit from what ConocoPhillips (COP) board member and respected energy analyst Arjun Murti calls The Rise of The Energy Pragmatism Era. That is to say, energy policy and energy producers are now realizing oil and gas has a bigger role to play compared to the recent ambitions to move as quickly as possible to a fully renewable energy future, or the energy transition era. SLB is modestly undervalued, has financial strength, has a resilient core business and a fast-growing and higher margin digital business. SLB obviously doesn't deserve a technology valuation, but it does deserve a higher valuation that it currently has. This article first appeared on GuruFocus. Sign in to access your portfolio
Associated Press
17-02-2025
- Business
- Associated Press
US Court of Appeals Rules in Favor of US Synthetic Corporation in ITC Case
THE WOODLANDS, Texas, Feb. 17, 2025 (GLOBE NEWSWIRE) -- ChampionX Corporation (NASDAQ: CHX) ('ChampionX') noted today that its US Synthetic Corp., a leading provider of polycrystalline diamond cutters for oil and gas drilling, has secured a significant legal victory as the U.S. Court of Appeals for the Federal Circuit (CAFC) reversing a prior International Trade Commission (ITC) determination that had deemed the company's patent claims ineligible under 35 U.S.C. § 101. The case, involving U.S. Patent No. 10508502, pertains to a polycrystalline diamond compact (PDC) used in rotary drill bits, which exhibits superior diamond to diamond bonding. The ITC had initially ruled that the patent's claims were directed to an abstract idea, arguing that the disclosed magnetic properties were merely side effects of the manufacturing process rather than physical characteristics of the compound. However, the Federal Circuit disagreed, finding that the claims described a specific composition of matter and not an abstract idea, reinforcing that the magnetic properties provide meaningful insights into the PDC's physical characteristics. 'We are extremely pleased with the Federal Circuit's decision, which reaffirms the validity of our patent and the importance of our innovation,' said Rob Galloway, President at US Synthetic. 'This ruling not only protects our intellectual property but also underscores the significance of our technology in advancing drilling performance and efficiency.' About US Synthetic US Synthetic, which is the Drilling Technologies segment of ChampionX, offers innovative, top-quality polycrystalline diamond cutters ('PDC'), bearings, valves, and mining tools to help customers drill the world's most demanding oil exploration and development projects, and for use in other industries. These highly specialized products are developed and produced based on more than 40 years of innovation and intellectual property development in material science applications. About ChampionX ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. ChampionX's expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. To learn more about ChampionX, visit our website at
