Patterson-UTI Energy Inc. (PTEN): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Patterson-UTI Energy ( PTEN) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.8%. By the end of trading, Patterson-UTI Energy fell $0.32 (-1.5%) to $20.93 on light volume. Throughout the day, 1,835,072 shares of Patterson-UTI Energy exchanged hands as compared to its average daily volume of 3,290,200 shares. The stock ranged in price between $20.75-$21.38 after having opened the day at $21.14 as compared to the previous trading day's close of $21.25. Other companies within the Basic Materials sector that declined today were: Kimber Resources ( KBX), down 12.5%, Great Basin Gold ( GBG), down 11.6%, USEC ( USU), down 8.3% and Recovery Energy ( RECV), down 7.4%.
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Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada. Patterson-UTI Energy has a market cap of $3.1 billion and is part of the energy industry. The company has a P/E ratio of 12.4, below the S&P 500 P/E ratio of 17.7. Shares are up 14.1% year to date as of the close of trading on Wednesday. Currently there are 10 analysts that rate Patterson-UTI Energy a buy, 1 analyst rates it a sell, and 9 rate it a hold.

TheStreet Ratings rates Patterson-UTI Energy as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the positive front, Gastar Exploration ( GST), down 13.2%, LRR Energy ( LRE), down 10.6%, Midway Gold ( MDW), down 10.2% and Banro Corporation ( BAA), down 9.1% , were all gainers within the basic materials sector with Apache Corporation ( APA) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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