Oil States International, Inc. (OIS) Sees An Activist Investor Raising Its Stake

With a market cap of $2.1 billion, Oil States International, Inc. (NYSE:OIS) is a company engaged in manufacturing drilling equipment and products for deepwater production facilities. The company has recently acquired through its subsidiary Oil States Industries Montgomery Machine Company, which is involved in production of high-specification components for the offshore capital equipment industry.

Moreover, with its stock losing ground on the back of the decline in oil prices, which affected the majority of companies from the energy sector, analysts are not very optimistic about the prospects of Oil States International, Inc. (NYSE:OIS). At the beginning of the year, Zacks downgraded the stock to ‘Underperform’ from ‘Neutral’, keeping the price target of $46.90

Aside from the decline of oil prices, Oil States International, Inc. (NYSE:OIS)’s value was hit by another development. In May, the company completed the spin-off of Civeo Corp (NYSE:CVEO), which provides accomodation services for companies engaged in exploration and production of oil, gas, iron ore, and coal. The spin-off was mainly urged by several major activist investors, such as Barry Rosenstein of JANA Partners and David Einhorn of Greenlight Capital. However, JANA Partners has since dumped its entire stake in Oil States and at the beginning of January it also disclosed selling its entire position in Civeo Corp.

In this way, with JANA exiting its position, what Oil States International, Inc. (NYSE:OIS)’s investors might need is the intervention of another activist, which will be able to help the company to maximize its shareholder value. Mr. Roepers, despite taking activist positions, prefers to stay under the radars, so it will be hard to determine whether he is actually engaged in any kind of discussions with the board or not. It might be also the case that Mr. Roepers is betting on oil prices to rebound, since he is invested in several companies tied with the oil and gas industry such as Baker Hughes Incorporated (NYSE:BHI) and Cameron International Corporation (NYSE:CAM).

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