UPDATE: Morgan Stanley Initiates Overweight on Edgen Group on Shale Exposure

Morgan Stanley initiates its coverage on Edgen Group EDG with an Overweight rating on favorable risk/reward. Morgan Stanley comments, "EDG is exposed to the most promising trends. We favor EDG's more specialized approach, focusing on just 14k SKUs vs. 150k offered by MRC. About 25% of EDG's sales comes from int'l upstream offshore projects, driven by demand for drilling and new jackup rigs amidst a seasoned fleet with an average age of 30 years. Another ~60% of EDG's sales comes from US upstream and midstream end-markets, of which 85% is related to shales. This compares to MRC which derives just 50% of its US upstream and midstream from shales, with minimal offshore exposure." EDG closed at $7.49 on Tuesday.