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RPC Inc., a play on horizontal drilling

|Includes: RPC, Inc. (RES)

Picked up on this stock in a screen in IBD on stocks that are being accumulated by mutual funds, it has had 5 quarters of increasing mutual fund sponsorship.

Its industry group (Oil and Gas Services&Equipment) is currently ranked 9th (of 197) by IBD

I like this stock as a play on the growth of horizontal drilling.  These wells are more complicated to drill and complete which means they often require the services of RPC Inc.

A few things I like about this stock

1) relatively low institutional ownership @ 26.3%
2) high management ownership @ 71%
3) low float of 43 million shares
4) Return on Equity of 30.94 %

Asset Turnover of 1.43, Net Margin of 13.38% = Return on Assets of 19.10%
Financial Leverage of 1.62

5) Increasing dividend payout last 2 quarters (signaling effect)
6) wise use of debt

7) completing a cup and handle consolidation right now, showing some good institutional accumulation on the right side of consolidation

I recommend starting with a 1/4 position now, and if (when) the market comes out of this correction add to it