Flying high after IPO with NCS Multistage

By : Elliot Bishop

The oil and gas industry is an unpredictable one because it has so many highs and lows. When you put your money in such a firm at least, you know what a ride you are in for. In some years you could end up with thousands in the bank and others close to none. For anyone who has invested in NCS Multistage Holdings Inc. (NASDAQ: NCSM), it looks like you won’t have to suffer such bit drawbacks.

Just before the NCS Multistage IPO in April, analysts had been skeptical about how the “small fish” would perform in a big company industry. After all, some of the company’s top competitors are triple the size of NCS Multistage. Those include Halliburton Inc. and Pardee Resources Co. Inc. both these companies far outweighed NCS Multistage. While NCS Multistage’s valuation still ranged in the millions post-IPO, the valuation of Pardee Resources and Halliburton were in the billions. And both companies had always been the unsure performance in the market. You could say that saying the same would be true for NCS Multistage was something that was expected.

Still, weeks after its IPO, NCS Multistage is still peaking. On its first day of trading, NCSM stock opened at $17, on the high side of its $15 t $18 spectrum. The shares closed at $19.54, higher than the proposed range. All 9.5 million shares on offer had been sold off by then. In the weeks since NCS Multistage shares hit a high of $28.20 while having a low of only $19.25, below the IPO price at the end of the first day but still higher than the proposed range. The stock closed at $27.04 by close of business day on Friday 26 th May 2017.

Overall NCS Multistage has been performing post-IPO. And it just might be getting started. Last week, the company announced its earnings for the first quarter of 2017. What most analysts and investors took home is that NCS Multistage’s revenue had increased by 154% from the same period in 2016 to $58.6 million in 1Q17. You could not remain skeptical that the firm would outperform its peers after noting that NCS Multistage had also hit financials that were even higher than its 2014 earnings. In 2014, most companies in the oil and gas industries hit an all-time high because the market was demanding. Things were good then. After factoring in the current oil glut, these financials proved just how strong NCS Multistage is, to be performing at its best as the industry suffers a depression.

As it stands now, NCS Multistage is outperforming many of its peers despite their size. Maybe even because of it. NCS Multistage operates in the methane gas production part of the energy industry. The company provides finishing touches to gas wells, enabling other firms to efficiently get to the gas. Of the companies in that bracket, only NCS Multistage has toplined its 2014 financials. Other companies are in fact reporting a 50% revenue stream when compared with that period. NCS Multistage underwriters gave their green lights to investors last week calling the stock a buy. They stated that the company’s growth prospects, organized operations, quality of work and experienced leadership had led to its good performance on the public market.