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Here's Why Hold Strategy is Apt for Cactus (WHD) Stock Now

Zacks Equity Research
·2 min read

Cactus, Inc. WHD has witnessed upward earnings estimate revisions for 2023 and 2024 in the past seven days.

What's Favoring the Stock?

The price of West Texas Intermediate crude is again currently trading at more than the $80-per-barrel mark. The positive trajectory in oil price is a boon for upstream operations like exploration and production activities.

Increased investments and activities from upstream firms will also lead to higher demand for engineered wellhead, pressure control and spoolable pipe technologies, which is a boon from Cactus. WHD’s highly engineered products are being used for onshore unconventional oil and gas wells. In the United States, Cactus has a strong onshore wellhead market share. Over the years, the firm, carrying a Zacks Rank #3 (Hold), has reported a solid margin profile.

However, rising costs and expenses are hurting Cactus’ bottom line. Also, WHD has significant exposure to heightened volatility in oil and gas prices.

Stocks to Consider

Better-ranked players in the energy space include Marathon Petroleum Corporation MPC, Sunoco LP SUN and Valero Energy Corporation VLO. While Marathon Petroleum and Valero Energy carry a Zacks Rank #2 (Buy), Sunoco sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA is a well-known name as a prime retailer of gasoline and convenience merchandise. MUSA, having more than 1,700 stores, has witnessed upward earnings estimate revisions in the past 60 days for 2023 earnings.

Marathon Petroleum is a well-know name since it operates largest refining system of the nation. In the past seven days, Marathon Petroleum has witnessed upward earnings estimate revisions for 2023.

Valero Energy is well poised to gain from constraint capacity in global refining activities and favorable demand for refined products. This, in turn, will possibly drive utilization in refining capacity and hence will boost cashflows.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report

Cactus, Inc. (WHD) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research