HAL’s Stock Price Faces Headwinds amid a Strong Performance
Halliburton versus peers and industry
Halliburton Company (HAL), the second-largest oilfield equipment and services (or OFS) provider by market capitalization, has had a steady run in the stock market in the past year. On March 13, 2017, HAL was trading at $50.88, ~43% higher than its price a year earlier. In this series, we’ll find out why.
The Market Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 OFS companies, has risen 14% in the past year. HAL makes up 15.6% of OIH. National Oilwell Varco (NOV), HAL’s smaller market cap peer, has risen 14%, and Weatherford International (WFT) has fallen 11% during the same period. West Texas Intermediate (or WTI) crude oil has risen 30% during this period.
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What does Halliburton’s stock price movement tell us?
Halliburton’s stock price has been trending up since April 2016. HAL’s quarterly revenues were resilient in the three quarters leading up to 4Q16 after they fell sharply in 1Q16. HAL’s cash flows also showed remarkable improvements in 4Q16 and 3Q16. HAL’s net losses deteriorated in 4Q16.
Crude oil’s price recovery has helped HAL to gain ground over the past year. You can read more about crude oil prices in What Investors Can Expect from Crude Oil Prices.
Halliburton’s moving averages
On March 13, 2017, Halliburton’s stock price was at a 7% discount to its 50-day moving average, and it was trading 5.3% above its 200-day moving average.
Moving averages exhibit smoother trends following a stock’s price movements. A 50-day moving average is a short-term moving average, while a 200-day moving average shows a long-term trend. HAL’s short-term moving average crossed over its long-term moving average in May 2016.
HAL’s stock price has been trading above its long-term moving average since the second week of April 2016. These movements indicate bullishness in HAL’s share price. However, since mid-February 2017, HAL’s stock price has been trending below its short-term moving average, suggesting some headwinds for the stock.
In this series, we’ll analyze Halliburton’s top and bottom line growths, its dividend yield, its balance sheet, and its free cash flow. We’ll start by taking a look at its management’s comments.