An Off-the-Beaten-Track Oil-Related Play With an AI Angle
This thinly traded stock is now regrouping after selling off in the carnage on Friday.
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There is strong bounce action on Monday morning with the indexes recovering about one-half of the sizable losses suffered on Friday. About 75% of stocks are in positive territory, but there is some hesitancy to chase this action. Buyers are feeling more cautious after the abrupt selloff on Friday and lingering concerns about valuations and overbought technical conditions.
If the bears are unable to exert some downside pressure, the buying should start to pick up as fear of missing out starts to build once again. Investors are now alert to how quickly news flow can shift, and that is making them a bit more cautious.
Looking for New Buys
I’ve been looking for some new buys. My focus is on stocks with strong growth, reasonable valuations, and solid charts. A name that I found that meets that criteria is Flotek Industries (FTK).
Flotek is a technology-driven chemical company that primarily serves the energy industry. It has two divisions. The first is Chemistry Technologies that focuses on sustainable, performance-enhancing chemicals for oil and gas operations, including drilling, stimulation, completions, production, and enhanced oil recovery. An example is chemical additives to wells that maximize oil and gas production.
The company's other division is Data Analytics, which provides real-time data solutions that leverage AI and sensor technology. An example is its PwrTek Platform, which is an advanced data analytics system for real-time equipment monitoring, predictive maintenance, and operational optimization in oil and gas facilities.
Flotek's Mobile Power Generation Assets is a recently acquired technology combining laser systems, patented gas distribution, and intelligent software to deliver efficient, mobile power for remote operations. The company is using AI to power the data analytics offerings and is seeing tremendous growth.
The Data Analytics segment had a 189% year-over-year revenue increase in Q2 2025, which triggered a huge move. This surge in business is driven by demand for real-time monitoring and predictive tools, and was bolstered by the April 2025 acquisition of mobile power assets, which added a $160 million revenue backlog.
The company produced EPS of $0.34 in 2024 and is expected to grow that 89% to $0.64 in 2025 and another 47% to $0.94 in 2026. In addition, the company has substantially beaten earnings estimates in each of the last four quarters. The stock currently trades with a trailing P/E of 28, which makes for a very attractive PE/G ratio.
Technically, FTK’s chart has formed a cup-and-handle pattern. It was turned back after a failed breakout over the key technical level around $16.50 and is now regrouping after it was sold off in the carnage on Friday.
Earnings are due out after the close on November 5, and there should be some positive anticipation as that date approaches.
The stock trades thinly and is not well-known. It often trades in tandem with energy prices, although its business is not strongly correlated with the ups and downs in oil prices.
I am actively trading the stock and building a core position.
At the time of publication, Rev Shark was long FTK.
