Baker Hughes, A GE Company - Worth A Look

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WG Investment Research
8.34K Followers

Summary

  • Is BHGE worthy of your investment dollars? Yes, I think so.
  • The Street is bullish on this newly formed company.
  • BHGE is a buy at today's price.

Baker Hughes, A GE Company (BHGE) is the byproduct of the merger between Baker Hughes and General Electric's (GE) oil and gas operations, and the merger was recently called the "most transformative deal in the oil services space in decades" by Evercore ISI. While I am not as bullish as Evercore, I do believe that this newly formed oil services company is worth a look, of course, if you are an investor with a long-term time horizon.

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The New(ish) Company

Management calls the newly formed company, "the world's first and only fullstream provider of integrated oilfield products, services and digital solutions". BHGE is lead by Lorenzo Simonelli, formerly the leader of GE Oil & Gas, and the company's management team has a wealth of knowledge in industries that matter.

(Source: Barclays 2017 CEO Energy-Power Conference)

The new Baker Hughes has a one-of-a-kind portfolio of businesses with several franchises that are market leaders in their respective industries. Additionally, management anticipates for the combination to create a great deal of value by allowing for the company to offer its customers a differentiated mix of products and services.

(Source: Barclays 2017 CEO Energy-Power Conference)

It also helps that management anticipates for the deal to create significant synergies over the next few years.

There is no denying the fact that the oil and gas industry has faced significant headwinds since mid-2014, but, in my opinion, the Baker Hughes-GE Oil & Gas tie-up is exactly the type of deal that needs to happen in this environment. Customers will be looking for their business partners to offer products and services that will help them save money and operate more efficiently and I believe that Baker Hughes, A GE company is positioned to offer just that.

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This article was written by

WG Investment Research profile picture
8.34K Followers
Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long BHGE, GE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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