In this current bear market, eight of the 10 top-rated industry groups are descending from the energy sector, with a focus on oil and gas stocks. And it doesn’t stop there. Oil and gas machinery and equipment group, which includes to Baker Hughes (BKR), ranked #23 out of 197 IBD pathway combinations.
Energy names, including BRK stocks, also have an unmistakable presence on the IBD Breakout Stock Index. In addition to Baker Hughes, oil and gas stocks EQT (EQT), total energy (TTE), Midwest Partners (WES) and Williams Coss. (WMB) also made their way to the index.
Further showing how energy is one of the few bright spots in this bear market, the SPDR Energy Sector Choice ETF (XLE) has jumped to a new high.
In this bear market, see who they are on the IBD Breakout Stock Index
Baker Hughes enters into hydrogen contracts
Headquartered in Houston, Baker Hughes has a global footprint, doing business in more than 120 companies and employing more than 54,000 people. The company’s operations span four main areas: oilfield services, oilfield equipment, turbomachinery and process solutions and digital solutions.
In March, Baker Hughes won a contract to provide hydrogen-ready turbocompression technology for a pipeline in Greece. Gas turbines and compressors can run on a mixture of natural gas and hydrogen for a new compressor station serving the country’s domestic gas supply. The contract comes on the heels of Baker Hughes’ first distillation of a hydrogen blend gas turbine for a gas network in Italy.
In the last quarter, the company posted a 25% profit growth. Analysts expect a 130% rise in earnings per share for the current quarter. Sales growth has been subdued, with an average annual decline of 6% over the past three years. In the inventory check, Baker Hughes has a D SMR rating, which measures sales growth, profit margins and return on equity.
BKR stock reclaims the benchmark with the RS line at a new high
While the bear market continues and the fundamentals of Baker Hughes lag, the relative strength line of BKR stock reached a 52-week high.
As the stock is establishing a new base, it has moved back above the 50 day moving average. BKR stock is consolidating showing a probability of 39.88 buying point. Baker Hughes reversed Wednesday to close 1.5% lower, but the stock is still up over 3% for the week so far.
After a profit-driven decline in April, the 21-day streak sank, dropping below the long-term 50-day record. To show rebounding technical strength, look for the 21-day line to bounce above the 50-day moving average as Baker Hughes explores a potential breakout.
But also consider the market environment. While the energy sector remains strong, the bear market continues to pull back most stocks, making it a very risky time to make new purchases.
ETF IBD Breakout Chances
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks index. As with other ETFs, this fund allows you to invest primarily in the entire index in addition to, or in lieu of, buying individual stocks. Learn more here about ETFs and the Innovator.
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