RigNet Inc (NASDAQ:RNET) shares rose 18.83% to $13.25 on Tuesday after WTI crude oil landed back above the $48/barrel level. It appears as though equities and commodities are starting to regain footing after the Brexit fallout, lifting oil-related stocks in the process.
RigNet is a provider of digital technology solutions to the oil and gas industry. The company operates in three segments: Eastern Hemisphere, Western Hemisphere and RigNet Systems Integration and Automation. It provides managed remote communications, managed services and collaborative applications, focusing on offshore and onshore drilling rigs, energy production facilities, and energy maritime.
Crude oil prices are being supported by improving market fundamentals, as the commodity has already begun to rebound before the EU referendum dominated the headlines. Now that the Brexit decision has been made, investors appear to be shifting their focus back on market dynamics once more and so far the strikes in Nigeria and Norway could keep a lid on supply and boost prices.
In addition, the latest inventory reports from the US have shown declines in crude oil stockpiles, reflecting easing oversupply concerns. At the same time, demand from Asia and the US typically picks up around this time of the year, also contributing to higher prices and more support for RigNet shares. Although the OPEC has refrained from implementing any output cap, the market appears to be stabilizing on its own.
Besides, the selloff after the Brexit seems to have lured investors into taking advantage of cheap price levels to buy stocks such as that of RigNet. Other offshore drilling companies such as Transocean and Atwood Oceanics have also seen strong gains in the past trading sessions.
RigNet has a market cap of $216.51 million at 17.73 million shares outstanding. Shares have been trading in a 52-week range of $10.32 to $37.02.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.