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Baker Hughes (NYSE:BHI) rewarded my patience today with a stellar earnings report that is moving the shares much higher in early trading today. Schlumberger (NYSE:SLB) also reported good earnings in the sector today. I think this is just the start of significant move up for the beaten-down shares of Baker Hughes.

Positives from Baker Hughes' earning report:

  • The company delivered $1 per share in earnings, more than the 77 cents a share it earned a year ago and crushing analysts' estimates calling for 78 cents a share.
  • Revenue came in at $5.33 billion vs. expectations for $5.26 billion.
  • The company has now seen double-digit year-over-year percentage revenue growth for the past five quarters, averaging 24% sales growth over that time span.

According to the business description from Yahoo Finance, "Baker Hughes Incorporated supplies oilfield services, products, and technology services and systems to the oil and natural gas industry worldwide."

Here are four reasons why Baker Hughes is still offers good value at $45 a share:

  1. The 22 analysts who cover the stock have a mean price target of $52 a share on Baker Hughes. Based on this earnings report, I would look for targets to rapidly be taken up.
  2. It trades at 11 forward earnings, a discount to its five-year average (16.0). It also has a five-year projected PEG of under 1 (0.66).
  3. The stock is still selling near the bottom of its five-year valuation range based on P/S, P/E, P/CF, and P/B.
  4. The stock looks as if it has gone through a bottoming process and is ready to move higher now, as it has just crossed its 50-day moving average prior to the earnings report (see chart below).

Click to enlarge image.

Source: Baker Hughes Crushes Estimates And Is Ready To Move Higher