Diamonds and Dogs

10/25/16

Oil stocks keep cooking. Oil driller, BHI Baker Hughes (BHI) is jumping 4% to a 52 week high, but not an all-time high, after easily beating earnings estimates as sales declined once again. Revenues dropped 37.8% year over year to $2.35 billion, and the company actually reported a loss, but going forward, the fundamentals are improving. Looking ahead, the fourth quarter activity in North America will modestly improve. Ovwerall, drillers added 11 oil rigs in the United States in the week to Oct. 21, bringing the total count up to 443, the most since February,

A chink in Under Armour (UA).  Under Armour reported better than expected earnings up 28% as sales rose 22% to $1.47 billion, but the stock is down 14% to a 52 week low on concerns of slower profits and reduced profit margins. Gross margins dropped from 48.8 percent a year ago to 47.5 percent in the quarter and the company reiterated its outlook for 2016. Net income came in at $128.2 million, or 29 cents per share, during the quarter. Can't blame sales at Under Armour, but the stock is not cheap trading for 55 times earnings and 41 times next years' earnings.