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If you’re going to beat the market, you need to have the courage to do what others won’t. Buying shares of energy services firm Hunting (LSE: HTG) a couple of years ago is a great example of this.

When the price of oil fell below $30 a barrel in January 2016, most investors wouldn’t go anywhere near the stock. The minority that did would have been able pick up a slice of Hunting for as little as 240p a pop. 

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Fast-forward to May this year and the same shares changed hands for 910p — a 279% return in roughly 29 months. That’s the power of contrarianism. 

And while the stock may have lost momentum over the last few months, today’s interim results could be the catalyst for a return to previous highs. 

Back in black

The numbers were certainly impressive. Thanks to the resurgence in the price of oil and the consequent rise in activity in US shale basins, revenue rose 39% to $442.8m in the six months to the end of June with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) hitting $72.6m — a jump of more than 500%. Underlying operating profit of $53.5m was achieved, in sharp contrast to the $9.3m loss sustained in H1 2017. 

In addition to the above, Hunting’s balance sheet continues to strengthen. By the end of June, the company had a net cash position of $39m — almost 30% higher than in December 2017. The FTSE 250 constituent also reported progress with the development of new technology and the expansion of a manufacturing facility at its Texas base, which should enable a 30% increase in production capacity once completed.

Perhaps the highlight of today’s report — and the driver behind the 16% rise in the shares — was the resumption of dividend payments with an interim payout of 4 cents per share declared.

While hardly the stuff of dreams for income investors (Hunting is likely to yield less than 1% in the current financial year), this is clearly indicative of confidence on the part of management. No board would want to suffer the indignity of needing to cancel dividends soon after reinstating them.

So long as recently introduced tariffs on steel and the “continuing volatile geopolitical environment” don’t make things too difficult for the £1.25bn cap, it’s not a stretch to see payouts becoming more attractive over time.

Patience required

For another example of why it can be profitable to buy when other investors are selling, take a look at fractured basement oil explorer (and soon to be producer) Hurricane Energy (LSE: HUR).

Having fallen to as low as 24p in November last year, the shares have now more than doubled in value.

This is not to say that Hunting and Hurricane’s situations were identical. The former was linked to a temporary revulsion for oil-related stocks. The latter can probably be more attributed to a lack of investor patience, not to mention a desire for traders to take profits on what remains a relatively high-risk stock.

Notwithstanding this, I’d be surprised if the previous share price high of 67p (achieved in May 2017) isn’t surpassed in the coming months as excitement builds over first oil at its Lancaster field in H1 2019. Indeed, should all go well, Hurricane might once again find itself the subject of takeover speculation. And that’s when the stock’s value could really begin to surge.

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Paul Summers owns shares in Hurricane Energy. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.