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Cactus (WHD)

Cactus designs, manufactures, sells and rents a range of highly engineered wellhead and pressure control equipment. Its products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of its customers' wells. In addition, it provides �eld services for all its products and rental items to assist with the installation, maintenance and handling of the wellhead and pressure control equipment. Cactus operates service centers in the United States, which are strategically located in the key oil and gas producing regions, including the Permian, Marcellus, Utica, Haynesville, Eagle Ford, Bakken, and SCOOP/STACK, among other areas, and in Eastern Australia.

Company profile

Ticker
WHD
Exchange
Website
CEO
Scott Bender
Employees
Location
Fiscal year end
SEC CIK
Subsidiaries
Cactus Wellhead, LLC • Cactus Wellhead (Suzhou) Pressure Control Co., Ltd. • Cactus Wellhead Australia ...
IRS number
352586106

WHD stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$53.50
Low target
$52.00
High target
$55.00
Morgan Stanley
Maintains
Equal-Weight
$55.00
26 Sep 22
Barclays
Maintains
Overweight
$52.00
8 Aug 22

Calendar

4 Aug 22
1 Oct 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
26 Aug 22 Cactus WH Enterprises Class B Common Stock Other Dispose J No No 0 5,429 0 13,523,958
26 Aug 22 Cactus WH Enterprises Units Class A Common Stock Other Dispose J No No 0 5,429 0 13,523,958
26 Aug 22 Bender Scott Class B Common Stock Other Dispose J Yes No 0 5,429 0 13,523,958
26 Aug 22 Bender Scott Units Class A Common Stock Other Dispose J Yes No 0 5,429 0 13,523,958
26 Aug 22 Bender Joel Class B Common Stock Other Dispose J Yes No 0 5,429 0 13,523,958
26 Aug 22 Bender Joel Units Class A Common Stock Other Dispose J Yes No 0 5,429 0 13,523,958
19 Aug 22 Cactus WH Enterprises Class B Common Stock Other Dispose J No No 0 6,819 0 13,529,387
19 Aug 22 Cactus WH Enterprises Units Class A Common Stock Other Dispose J No No 0 6,819 0 13,529,387
19 Aug 22 Bender Scott Class B Common Stock Other Dispose J Yes No 0 6,819 0 13,529,387
19 Aug 22 Bender Scott Units Class A Common Stock Other Dispose J Yes No 0 6,819 0 13,529,387
6.4% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 212 209 +1.4%
Opened positions 33 39 -15.4%
Closed positions 30 16 +87.5%
Increased positions 77 76 +1.3%
Reduced positions 79 77 +2.6%
13F shares Current Prev Q Change
Total value 3.12B 9.16B -66.0%
Total shares 78.21M 76.6M +2.1%
Total puts 49.2K 48.3K +1.9%
Total calls 48.7K 66K -26.2%
Total put/call ratio 1.0 0.7 +38.0%
Largest owners Shares Value Change
Cactus WH Enterprises 15.01M $572.52M 0.0%
Vanguard 5.56M $223.91M -1.3%
TROW T. Rowe Price 5.36M $215.83M -4.4%
BLK Blackrock 4.27M $171.77M +7.0%
Alliancebernstein 3.31M $133.49M -25.4%
Van Eck Associates 2.78M $111.8M -7.0%
BK Bank Of New York Mellon 2.61M $105.12M -6.6%
JPM JPMorgan Chase & Co. 2.02M $81.29M +85.5%
Clearbridge Advisors 2M $80.63M +0.1%
Wellington Management 1.8M $72.5M +33.1%
Largest transactions Shares Bought/sold Change
Alliancebernstein 3.31M -1.13M -25.4%
JPM JPMorgan Chase & Co. 2.02M +930.67K +85.5%
Lord, Abbett & Co. 849.19K +849.19K NEW
TimesSquare Capital Management 636.02K +636.02K NEW
GS Goldman Sachs 109.32K -537.43K -83.1%
Wellington Management 1.8M +447.62K +33.1%
Boston Trust Walden 1.43M +393.5K +38.1%
FMR 915.93K +347.7K +61.2%
Stephens Investment Management 1.02M +322.09K +45.9%
BLK Blackrock 4.27M +278.26K +7.0%

Financial report summary

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Risks
  • The global outbreak of COVID-19 and associated responses have had, and are expected to continue to have, an adverse impact on our business and operations.
  • Demand for our products and services depends on oil and gas industry activity and customer expenditure levels, which are directly affected by trends in the demand for and price of crude oil and natural gas and availability of capital.
  • Growth in U.S. drilling and completion activity, and our ability to benefit from such growth, could be adversely affected by any significant constraints in equipment, labor or takeaway capacity in the regions in which we operate.
  • We may be unable to employ a sufficient number of skilled and qualified workers to sustain or expand our current operations.
  • Our business is dependent on the continuing services of certain of our key managers and employees.
  • Political, regulatory, economic and social disruptions in the countries in which we conduct business could adversely affect our business or results of operations.
  • We are dependent on a relatively small number of customers in a single industry. The loss of an important customer could adversely affect our results of operations and financial condition.
  • Delays in obtaining, or inability to obtain or renew, permits or authorizations by our customers for their operations could impair our business.
  • Competition within the oilfield services industry may adversely affect our ability to market our services.
  • New technology may cause us to become less competitive.
  • Increased costs, or lack of availability, of raw materials and other components may result in increased operating expenses and adversely affect our results of operations and cash flows.
  • We design, manufacture, sell, rent and install equipment that is used in oil and gas E&P activities, which may subject us to liability, including claims for personal injury, property damage and environmental contamination should such equipment fail to perform to specifications.
  • Our operations are subject to hazards inherent in the oil and natural gas industry, which could expose us to substantial liability and cause us to lose customers and substantial revenue.
  • Oilfield anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us.
  • Our operations require us to comply with various domestic and international regulations, violations of which could have a material adverse effect on our results of operations, financial condition and cash flows.
  • Compliance with environmental laws and regulations may adversely affect our business and results of operations.
  • Existing or future laws and regulations related to greenhouse gases and climate change and related public and governmental initiatives and additional compliance obligations could have a material adverse effect on our business, results of operations, prospects, and financial condition.
  • We are a holding company whose only material asset is our equity interest in Cactus LLC, and accordingly, we are dependent upon distributions from Cactus LLC to pay taxes, make payments under the TRA and cover our corporate and other overhead expenses and pay dividends to holders of our class A common stock.
  • Cactus WH Enterprises LLC has the ability to direct the voting of a significant percentage of the voting power of our common stock, and its interests may conflict with those of our other shareholders.
  • Our amended and restated certificate of incorporation and amended and restated bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our Class A common stock.
  • Future sales of our Class A common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
  • Cactus Inc. will be required to make payments under the TRA for certain tax benefits that we may claim, and the amounts of such payments could be significant.
  • In certain cases, payments under the TRA may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the TRA.
  • If Cactus LLC were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we and Cactus LLC might be subject to potentially significant tax inefficiencies, and we would not be able to recover payments previously made by us under the TRA even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.
  • A failure of our information technology infrastructure and cyberattacks could adversely impact us.
  • Holders of our Class A common stock may not receive dividends on their Class A common stock.
  • If we are unable to fully protect our intellectual property rights or trade secrets, we may suffer a loss in revenue or any competitive advantage or market share we hold, or we may incur costs in litigation defending intellectual property rights.
Management Discussion
  • Product revenue for the year ended December 31, 2021 was $280.9 million compared to $206.8 million for the year ended December 31, 2020. The increase of $74.1 million, representing a 36% increase from 2020, was primarily due to higher sales of wellhead and production related equipment resulting from higher drilling and completion activity by our customers compared to 2020 and the impact of cost recovery efforts implemented throughout 2021. In the prior year, the industry downturn impacted sales for the majority of 2020 due to depressed commodity prices as a result of the pandemic.
  • Rental revenue for the year ended December 31, 2021 was $61.6 million, a decrease of $4.5 million, or 7%, from $66.2 million for the year ended December 31, 2020. The decrease was primarily due to reduced completion rental activity among our customer base and the extraordinary market pressure driven by depressed energy demand associated with the COVID-19 pandemic. Recovery in our rental business has been slower than our product business as an excess supply of competing rental equipment relative to demand from customers led to market dynamics that did not justify the deployment of our assets in certain cases.
  • Field service and other revenue for the year ended December 31, 2021 was $96.1 million, an increase of $20.5 million, or 27%, from $75.6 million for the year ended December 31, 2020. The increase was attributable to increased customer activity compared to the prior year, resulting in higher billable hours, ancillary services and repairs of customer property primarily related to product sales in 2021.

Content analysis

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New words: armed, billion, Bureau, closure, committed, country, cubic, earlier, explosion, feet, fire, foreseeable, free, Freeport, inflationary, instance, liquified, longer, maturity, moderate, nationwide, Northeastern, notwithstanding, OCTG, plant, relief, restart, show, shutdown, structure, threat, tubular, TX
Removed: cancellation, end, growth, heading, outbreak