In this current bear market, eight of the 10 top-ranked industry groups all hail from the energy sector, with a focus on oil and gas stocks. And it doesn't stop there. The Oil and Gas Machinery and Equipment group, which includes to Baker Hughes, ranks No. 23 out of the 197 groups IBD tracks.
Energy names, including BRK stock, also have an unmistakable presence on the IBD Breakout Stocks Index. In addition to Baker Hughes, oil and gas stocks EQT, TotalEnergies, Western Midstream Partners and Williams Cos. have also drilled their way onto the index.
Further showing how energy is one of the few bright spots in this bear market, the Energy Select Sector SPDR ETF has jumped out to a new high.
In This Bear Market, See Who's On The IBD Breakout Stocks Index
Baker Hughes Powers Up Hydrogen Contracts
Based in Houston, Baker Hughes has a global footprint, doing business in over 120 companies and employing more than 54,000 people. The company's operations span four main areas: Oilfield Services, Oilfield Equipment, Turbomachinery & Process Solutions and Digital Solutions.
In March, Baker Hughes won a contract to provide hydrogen-ready turbo-compression technology for a pipeline in Greece. The gas turbines and compressors can run on a blend of natural gas and hydrogen for a new compression station that will serve domestic gas supply in the country. The contract follows a Baker Hughes instillation of the first hydrogen-blend gas turbine for a gas network in Italy.
Last quarter, the company posted 25% earnings growth. Analysts forecast a 130% EPS spike for its current quarter. Sales growth has been weak, averaging annual declines of 6% over the last three years. In Stock Checkup, Baker Hughes has a D SMR Rating, which tracks sales growth, profit margins and return on equity.
BKR Stock Retakes Benchmark With RS Line At New High
While the bear market continues and Baker Hughes' fundamentals have lagged, the relative strength line for BKR stock has hit a new 52-week high.
As the stock sets up a new base, it has moved back above its 50-day moving average. BKR stock is working on a consolidation showing a potential 39.88 buy point. Baker Hughes reversed Wednesday to close down 1.5%, but the stock remains up over 3% for the week so far.
After an earnings-driven decline in April, the 21-day line sank, falling below the longer-term 50-day benchmark. To show rebounding technical strength, look for the 21-day line to get back above the 50-day moving average as Baker Hughes explores a potential breakout.
But also keep the market environment in mind. While the energy sector remain strong, the bear market continues to drag down most stocks, making it a risky time to make new buys.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the entire index in addition to or rather than buying the individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
