We revisit our investment thesis for regional backs, dig into first-quarter results from our top picks and add two financial stocks to this basket.
The trends toward longer horizontal segments and tighter spacing between fracturing stages in US shale oil and gas plays continue to increase the volume of water needed to complete these wells–a major cost center. We highlight the exploration and production companies pushing the envelope on water recycling and the technology providers that stand to benefit from reducing these costs.
A strengthening US economy, the potential for reduced regulation and the Federal Reserve’s efforts to normalize interest rates gradually should drive earnings growth at regional banks. We highlight a handful of names that offer the best leverage to these trends.
Despite the road blocks faced by the high-profile Keystone XL and Dakota Access Pipelines, the Federal Energy Regulatory Commission approved a record number of natural-gas pipelines under the Obama administration. This build-out should continue over the next several years, as widening price differentials between regional natural-gas hubs encourage the development of additional takeaway capacity that provides access to under-served markets.