TETRA Technologies, Inc. (NYSE: TTI) is an oil and gas services company comprised of three divisions
– Fluids, Well Abandonment & Decommissioning (WA&D), and Production Enhancement.
The Company’s Fluids Division manufactures and markets clear brine fluids,
additives and other associated products and services to the oil and gas industry
for use in well drilling, completion, and workover operations both domestically
and in certain regions of Europe, Asia, Latin America and Africa. The Division
also markets certain fluids and dry calcium chloride, manufactured at its
production facilities, to a variety of domestic and international markets
outside the energy industry.
The Company’s WA&D Division provides a broad array of services required for the
abandonment of depleted oil and gas wells and the decommissioning of platforms,
pipelines, and other associated equipment. The Division services the onshore
U.S. Gulf Coast region and the inland waters and offshore markets of the Gulf of
Mexico. The Division is also an oil and gas producer from wells acquired in its
well abandonment and decommissioning business and provides electric wireline,
engineering, workover, and drilling services.
The Company’s Production Enhancement Division provides production testing
services to the Texas, Louisiana, Alabama, Mississippi, the offshore Gulf of
Mexico and certain Latin American markets. In addition, it is engaged in the
design, fabrication, sale, lease and service of wellhead compression equipment
primarily used to enhance production from mature, low pressure natural gas wells
located principally in the mid-continent, Rocky Mountain, Texas and Louisiana
regions of the United States and western Canada. The Division also provides the
technology and services required for the separation and recycling of oily
residuals generated from petroleum refining operations.
The Stock's price gained 49.8% over the past 3 months; 96.3% over the past 6
months; and 209.7% over the past 12 months.
TETRA is classified as a mid-cap growth company. The Stock is rated to
significantly outperform the market over the next six months. The Company
was incorporated in 1981.
TETRA's corporate
headquarters are located at The Woodlands, Texas. The Company's number of
employees: 1,668.
Sector: Energy; Industry: Oil Well Services &
Equipment; Ticker:TTI; Exch:
NYSE;
05/19/06 Closing Price: $54.78)
STOCK GRADE (ASG: 46.80)
BUSINESS & FINANCIAL SUMMARY
(Yahoo)
EXPANDED BUSINESS DESCRIPTION
(Reuters)
STOCK INFO/RESEARCH
(MSN)
OWNERSHIP
(MSN)
KEY DEVELOPMENTS
(MSN),
RECENT NEWS
(MSN) &
HEADLINES (Yahoo)
HISTORICAL PRICES (Yahoo)
&
PRICE CHART
(IQChart)
COMPANY'S WEB SITE
STOCK'S CORE
STRENGTHS (SEE: Table Below)
| Management's Effectiveness (12 Mo.) | . . . | Return on Equity: | 18.54% |
| Profitability (12 Mo.) | . . . | Profit Margin: | 9.23% |
| Stock's Growth Record (12 Mo.) | . . . | Revenue: | 50.35% |
| . . . | EPS: | 109.52% | |
| . . . | Price: | 220.98% | |
| . . . | Dividend: | NA | |
| PE & EPS (12 Mo.) | . . . | Price/Earnings: | 39.13 |
| . . . | Earnings/Share: | 1.44 | |
| Price / Share (Closing) | . . . | 05/19/2006: | $54.78 |
TETRA TECHNOLOGIES, INC. -
EVALUATION
TETRA's
stock emerged as an ACE'S selection based on the evaluation results of the
criteria listed below. The evaluation results are encapsulated as one value in
ASG (short for ACE'S Stock Grade). ASG
is proprietary variable that was devised by ACE'S to measure the
quality of a stock for investment. TETRA's ASG value of 45.80 is
GOOD.
A. MANAGEMENTS EFFECTIVENESS - AVERAGE
B. PRODUCTS & SERVICES, SET OF - EXCELLENT
C. SALES - AVERAGE
D. CASH FLOW, FREE -
AVERAGE
E. PROFITABILITY - GOOD
F. PRICE-EARNINGS RATIO (P/E) - POOR
G.
FINANCIAL HEALTH -
POOR
H.
MARKET CAPITALIZATION -
GOOD
I.
TRADED VOLUME -
GOOD
J.
PRICE GROWTH - EXCELLENT
A. MANAGEMENTS EFFECTIVENESS - AVERAGE
How well a company performs
generally - in its
business operations, controlling costs, the success of its products and
services in the market place, profitability, and the like - depends on its
management's efficiency. Return on Equity ( ROE) is used by ACE'S as a general indication
of the company's efficiency.
TETRA's ROE (ttm) of 18.3% is lower (by 4.00%) than the Industry's ROE of
22.3%; and higher (by 2.00%) than the S&P 500's ROE of 16.3%.
(Ref.:
MSN Finance\Key Ratios).
ACE'S gives a preferential rating to a company that has a
comparable or relatively higher ROE than the Industry. ACE'S rating of
TETRA's Management's Effectiveness: AVERAGE.
^ Back to Evaluation
B. PRODUCTS & SERVICES, SET OF -
EXCELLENT
Products and services are the elements that enables a company to have a presence
in its target market and generate sales. The set of products and services that a company has and how successful those products and services performs in the
target market are very important factors in considering a company's stock for
investment.
TETRA's line-up of products and services:
Calcium chloride and bromides.
DECOMMISSIONING
& HEAVY LIFT SERVICES
The decommissioning of offshore pipelines and platforms.
DIVING
& MARINE SERVICES
A full complement of commercial diving services and a fleet of marine vessels.
FLUIDS & FILTRATION
The use of clear brine fluids for well completions, workovers, and drilling
operations.
ELECTRIC WIRELINE
A full array of cased well completion and evaluation
services along with open and cased hole pipe recovery.
ABANDONMENT
& DECOMMISSIONING SERVICES
The abandonment and decommissioning of a field and its associated wells.
Maritech Resources, Inc., TETRA's exploitation and
production subsidiary, evaluates mature oil and gas properties to determine both
the economic life remaining and the future abandonment and decommissioning
liabilities.
PROCESS
SERVICES
Provides oil recovery, oily residuals processing and recycling services to the
worldwide hydrocarbon extraction, processing and transport industries.
PRODUCTION
TESTING SERVICES
Provides a full range of onshore and offshore production testing, cleanup,
laboratory and related services.
RIG SERVICES
Provides a fleet of rigs, specialized ancillary equipment, and trained
professionals capable of supporting customers' inland water and offshore
drilling, completion, workover, and plug and abandonment (P&A) operations
WELL ABANDONMENT
SERVICES
A single-source provider of well abandonment services in North America,be it in
the Gulf Coast inland waters, onshore, offshore or subsea.
WELLHEAD COMPRESSION SERVICES
Through Compressco, Inc., a TETRA company, offers production enhancement services with the GasJack® wellhead compression unit.
The GasJack® can increase the daily production and total
recoverable reserves allowing the customer to substantially increase both cash
flows and the net present value of their producing reserves of natural oil and
gas.
ACE'S
gives a preferential rating to a company who have
a variety of product
and services that have present and continued utility in a broad and
dynamic market.
An estimation of the latter products' utility, distinctive qualities and competitiveness would be subjective assessments.
However, there is one objective data that indicates how well the subjective
elements of TETRA's products and services
are assessed and used by its target market - the company's
sales.
ACE'S rating of
TETRA's line-up of Products & Services: EXCELLENT
^ Back to Evaluation
C. SALES - AVERAGE
Sales is an important indicator on how a company's products and services
performs in its target market. Generally, a high sales figure is preferred than a lower figure.
Also, a steady and appreciable growth in a company's total sales from one year to the next is a key indicator on how a
company is able (or unable) to sustain and improve the utility of its products and services in the marketplace.
TETRA's annual sales was $303.4M in 12/2001, $242.6M in 12/2002, $318.7M in 12/2003,
$353.2M in 12/2004 and $531.0M in 12/2005. Relative to 12/2001, the
Company's sales increased -20.03% in 2002, 5.04% in2003, 16.41% in 2004 and
75.02% in 2005,
(Ref.:
MSN Money\Financials).
TETRA's ttm annual sales of $564.8M was 65.00% less than the Industry's
sales of $1,613.9M.
TETRA's ttm Sales growth rate of 28.50% was 4.1% points higher than the
Industry's rate of 24.40%.
(Ref.:
MSN Money\Research).
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a high and progressively increasing level of sales from year-to-year. TETRA's
year-to-year annual sales - from 2002 to 2005 - have progressively increased. In terms of sales
volume, the Companies past 12 month sales is 65.0% less than the Industry.
In terms of growth rate,
TETRA's rate surpasses the Industry by 4.1% points. ACE'S rating of
TETRA's Sales Growth Rate: AVERAGE.
^ Back to Evaluation
D. CASH FLOW, FREE -
AVERAGE
Cash flow is crucial to the operation and survival of companies. A company
having ample ready cash ensures that creditors, employees, and others can be
paid on time.
Cash flow could be considered as a better measure of a business's profitability
than earnings, because a company can show positive net earnings and have insufficient cash flow (that is, the company
is not able to pay its debts). Cash Flow
thus can be used as an indicator of a company's financial strength.
TETRA's cash flow during the past 5 years: $58.1M in 12/2001;
$25.0M in 12/2002; $36.4M in 12/2003; $56.4M in 12/2004; and $52.8M in
12/2005.
(Ref.:
MSN Money\Financials).
ACE'S
gives a preferential rating to a company that have demonstrated the ability to
sustain a positive and appreciable cash flow from year-to-year. TETRA's
year-to-year cash flow - from 2001 to 2005 - have been positive and appreciable,
averaging $45.74M annually. ACE'S rating of
TETRA's Cash Flow: AVERAGE.
^ Back to Evaluation
E. PROFITABILITY - GOOD
Making a profit is the ultimate goal of every company. A useful gauge of a
company's profitability is its net income (also referred to as "earnings"). Related to a company's outstanding shares of common stocks, the company's total earnings is transformed
to "earnings per share" (or "EPS" for short). EPS is a very popular indicator of a company's profitability and a
powerful variable that influences the price of a company's stock.
TETRA's annual Net Income, for the past 12 months, of $51.9M is
73.41% less than the
Industry's Income of $195.2M). For the past 5 years, TETRA's annual Net Income are:
$23.9M
in 12/2001; $8.9M in 12/2002; $21.6M in 12/2003; $17.7M in 12/2004; and $38.0M in
12/2005. In terms of growth, TETRA's Net Income have grown
241.60%
during the past 12 months (vs. the Industry's 111.50% growth rate).
(Refs.
MSN Money\Financials\Statements;
MSN Money\Wizard)
ACE'S gives a preferential rating to a company that have demonstrated the ability to
sustain a positive, appreciable and increasing net income..TETRA's
year-to-year annual Net Income - from 2001 to 2005 - was on the plus side,
averaging $22.02M annually. In terms of
income growth rate,
TETRA's 241.6% rate surpasses the Industry by 130.1% points. ACE'S rating of
TETRAs Profitability: GOOD.
F. PRICE-EARNINGS RATIO (P/E) - POOR
A stock's Price-Earnings ratio tells us roughly how much investors are willing
to pay per dollar of earnings. Price-Earnings
is a ratio of a company's current share price compared to its per-share
earnings. The P/E ratio is a much better indicator
of the value of a stock than the market price alone.
In general, a high P/E means high projected earnings in the future. As such, the
P/E ratio could be interpreted as the reflection of the market's optimism concerning a firm's growth prospects. To
determine whether a particular P/E is high
or low, take into account a company's growth rates; and the P/Es of other
companies in the same industry. Historically,
the average P/E ratio in the market has been around 15-25.
TETRA has a P/E ratio of 38.74 (ttm) which is
13.64%
points higher - or 54.34% greater -
than the
Industry's P/E of 25.10 (ttm).
(Ref.: Yahoo! Finance\Competitors)
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower P/E than the Industry. ACE'S rating of
TETRA's P/E Ratio: POOR.
^ Back to Evaluation
G. FINANCIAL HEALTH - POOR
The assumption of debt, i.e., financial leverage, are used by companies to
finance its assets. The magnitude of the debt's expense component affects the company's net income.
A company with significantly more debt than equity is considered to be highly
leveraged. A popular measure of financial
leverage is the "debt/equity ratio". A higher debt/equity
ratio generally means that a company has been aggressive in financing its growth
with debt. This higher ratio can result
in volatile or negative earnings as a result of the additional interest expense.
Thus, the Debt/Equity Ratio is popularly used
as a measure of a company's financial health.
TETRA's 0.55 Debt/Equity Ratio (latest 12 months) is 48.64% more than
the Industry's Ratio of 0.37, and 47.61% less than the S&P 500's Ratio 1.05.
.
ACE'S gives a preferential rating to a company that has a
comparable or relatively lower debt ratio than the Industry. ACE'S rating of
TETRA's
Debt Ratio: POOR (HIGHER RATIO THAN INDUSTRY AVERAGE).^ Back to Evaluation
H. MARKET CAPITALIZATION - GOOD
Market Capitalization (or market cap for short) is a measure of a company's
size. The market cap provides a broad gauge
of the growth-versus-risk potential of a company. Historically, large caps have
experienced slower growth with lower
risk; whereas small caps have experienced higher growth potential, but with
higher risk.
The market cap of a company is calculated by multiplying the number of its
outstanding shares by the shares' current market price. There are presently six classes of Market Cap: Mega Cap, Big/Large
Cap, Mid Cap, Small Cap, Micro Cap and Nano Cap. ACE'S assigns an
Excellent rating to Small Cap stocks; Good to Mid Caps; Average to Big/Large
Caps; and Below Average to Mega Caps. ACE'S excludes Micro
and Nano Caps in its stock picks.
TETRA is classified as a mid cap value company with a market
capitalization of $1,964.58M and with outstanding shares of 34.99M.
ACE'S gives a preferential rating to small and mid cap companies. ACE'S rating of
TETRA's
Market Cap: GOOD.^ Back to Evaluation
I. TRADED VOLUME -
GOOD
A stock's price goes up or down based on the laws of supply and demand. Simply
stated, when a stock's price goes up, there must be significant buying demand
for the stock. Volume is the actual number of shares traded daily. Traded volume
could be used as a gauge of the demand for a stock.
TETRA has an 3-month Average Daily Volume of 560,216 shares; and
a 10-day Average Daily Volume of 777,867 shares.
(Refs.:
Yahoo! Finance\Statistics).
ACE'S assigns an Excellent rating for
+1,000,000 trading volumes; Good for 500,001-999,999 volumes; Average for
100,000 - 500,000 volumes; and Below Average for -100,000 volumes.
ACE'S gives a preferential rating to a company that sustains a
lively trade volume from week-to-week and month-to-month. ACE'S rating of
TETRA's Traded
Volume: GOOD.
J. PRICE GROWTH - EXCELLENT
Price growth is the 12-month increase in the price of a
stock (displayed as a percentage). As of 05/19/06, TETRA had a 3-month growth
rate of 49.8% (vs. the Industry's 10.5% rate), a 6-month rate of 96.3% (vs.
the Industry's 17.8% rate), and a 12-month rate of 209.7% (vs. the
Industry's 46.0% rate).
(Refs.:
MSN Money\Research). ACE'S gives a preferential rating to a company that have
demonstrated a solid capacity for high price growth and outperforming other
stocks in the Industry. ACE'S rating of
TETRA's
Price Growth: EXCELLENT.