Selection for this week
Some Pros about the stock
Some Cons about the stock
Criteria for choosing
The previous selections

The momentum stocks in the portfolio had modest gains as a whole since last Thursday as the market pressure on this type of stock eased a bit. All the stocks selected so far continue to enjoy strong backing from the Quant system.

Add: NESR (National Energy Services) – Oil & Gas Equipment & Services

What does the company do?

National Energy Services Reunited (NESR) provides oilfield services across the Middle East and North Africa. Founded in 2017 and headquartered in Houston, Texas, the company offers drilling, hydraulic fracturing, cementing, coiled tubing, well testing, production optimization, and other integrated energy services that support oil and gas exploration, development, and production.

Why Some Investors Are Bullish

Record Q1 2026 results validate the company’s growth strategy.
NESR reported record Q1 2026 revenue of $404.6 million, up 33.5% year over year, while net income more than doubled sequentially and increased 129% from a year earlier. Results exceeded analyst expectations, demonstrating the company is successfully converting its backlog into strong earnings growth.

The Jafurah contract provides a long-term growth catalyst.
NESR secured a multiyear, multibillion-dollar hydraulic fracturing contract for Saudi Arabia’s Jafurah field—the largest single service award in the sector’s history. The project strengthens the company’s long-standing relationship with Saudi Aramco and provides years of revenue visibility.

Strong competitive position and robust project pipeline.
NESR has become one of the leading independent oilfield service providers in the Middle East and North Africa, supported by an approximately $3 billion tender pipeline and major awards across Saudi Arabia, Kuwait, and North Africa. Long-term contracts, typically lasting three to nine years, provide greater revenue visibility than many oilfield service peers.

Strong earnings outlook supports continued growth.
Analysts expect solid earnings growth over the next two years as large projects ramp and existing contracts expand. While valuation should always be considered alongside future execution, continued analyst price target increases reflect confidence in the company’s long-term business outlook.

Improving balance sheet and shareholder returns.
NESR has significantly reduced net debt, strengthened liquidity, and continues to prioritize cash generation. Management has also announced a quarterly dividend and a $50 million share repurchase program while continuing to invest in future growth.

What Bears Are Worried About

Operations remain concentrated in the Middle East and North Africa.
NESR generates most of its revenue from the MENA region, leaving the company exposed to geopolitical tensions, commodity price fluctuations, and regional disruptions that could affect operations.

Quarterly results can be uneven.
Revenue and earnings may fluctuate as large projects transition between phases and contract timing shifts. Investors should expect some variability in quarterly results despite the company’s positive long-term growth trajectory.

Cash flow depends on customer payment timing.
Working capital can fluctuate because payments from national oil companies are sometimes delayed. This can temporarily pressure free cash flow and affect the timing of shareholder return programs.

Large project execution carries risk.
The Jafurah project is still in its ramp-up phase, making efficient execution critical to maintaining margins. Large integrated projects can also result in unexpected mobilization costs or other one-time expenses.

High expectations leave less room for disappointment.
Following the stock’s significant rally, investor expectations have increased substantially. Future performance will likely depend on NESR successfully executing large projects, meeting earnings expectations, and navigating geopolitical and operational risks without major setbacks.

My View

I’ve become increasingly interested in NESR because it continues to deliver strong execution, record results, and a growing pipeline of long-term contracts. I like its leadership position in the Middle East, improving balance sheet, and commitment to returning capital to shareholders. I also recognize the risks, including regional exposure, project execution, and high investor expectations after the stock’s strong rally. For me, the long-term opportunity depends on management continuing to execute and grow earnings.

The Quant system has a high opinion of this stocks future prospects. It is giving its highest rank to metrics PEG Non-GAAP (FWD), Revenue Growth (FWD), EPS FWD Long Term Growth (3-5Y CAGR) and ROE Growth (FWD). The 1Y Price Performance is +321% and FY1 Up Revisions (last 90 days) has 6 analysts and no analysts down revisions for FY1.

Top Quant Stock of the Week Criteria

I am using a Quantitative research platform that provides a daily list of top-ranked stocks to buy or sell, based on a Comprehensive Quant Score. This Quant system uses computer algorithms to come up with its rankings. This score incorporates multiple factors, including valuation, growth, profitability, momentum, and EPS revisions.

I will be giving heavy weight to strong momentum and strong EPS revisions to make the weekly selection. Then, I will use my tested proprietary criteria to sort and then break any tie.

One stock will be selected each week. That would make 52 selections a year if I don’t miss any weeks because of internet problems.

The hold times for the stocks added will be 1 week to years. Although a 1 week hold would be rare, it could happen if the stocks Quant metrics took a big nose dive right after being selected. If an added stock maintains its good metrics, it will be kept in the portfolio until it doesn’t. No time limit. The Quant system will tell me when it is time to let it go. So the hold time is short, medium and long depending on the Quant system metrics.

All countries are included. ADR’s are ok but Pink Sheet stocks will not be allowed.

Certain Industries are excluded. My testing shows they do not perform well using Quantitative rankings. Two of the main ones are BioTechnology and Pharmacueticals.

The Remove Criteria: Once the stock no longer qualifies to be retained in the Portfolio, it will be removed. This could be because the companies metrics have deteriorated since selection, it is involved in a buyout or financial reporting problems.

Once a stock has been added to the Active list, it will not be added to. No doubling down.

The stocks considered are larger small cap, mid cap, large cap and Mega cap. They will be fairly easy to trade with opening or closing market orders as one of the ways to enter and exit positions.

It should be expected that about 50 stocks will be Active in the Portfolio in any given week, once it gets to the two year mark.

All stocks are added as equal weight. No rebalancing is to occur.

To be considered for addition, the stock has to be in the top group of Quant rankings for just several weeks. This is to allow newly upgraded stocks to qualify quickly. Hopefully, this will catch a couple of strong momentum stocks early in their move.

Once a stock is removed for cause, it can be added back in once it meets the add criteria. No waiting period is required.

There will be no limits on percentages of stocks in the Portfolio by Sector or Industry.

Previous Selections:

All content on this site is for informational purposes only and does not constitute financial advice. Consult relevant financial professionals in your country of residence to get personalized advice before you make any trading or investing decisions. This post was written with the assistance of artificial intelligence. The original ideas and final review are human-generated. Disclaimer