FMC Technologies versus industry ETFs
FMC Technologies (FTI) is one of the most well-known US oilfield equipment and service (or OFS) providers in the US. The value of its shares has decreased sharply in 2015. On December 21, FTI was trading at $28.70. This was ~40% lower than its price at the beginning of this year.
The VanEck Vectors Oil Services ETF (OIH), an index of 25 OFS companies, has declined 21% during the same period. Weatherford International (WFT), FTI’s similar market cap peer, declined 33% since January 2. Compared to FTI’s $6.5 billion market capitalization, WFT’s market capitalization stands at ~$6.1 billion. FTI comprises 3.9% of OIH. The entire OFS industry has been negatively affected by the energy price crash since June 2014.
What does FTI’s share price movement tell us?
Since the beginning of this year, FTI’s share price started from its year-to-date high of ~$46 and has trended down until now. FTI’s net income continued to fall until fiscal 3Q15. Quarter-over-quarter, the fall in its net income accelerated in fiscal 2Q15 and moderated in fiscal 3Q15. Revenues, which seemed to be stabilizing in F2Q15 compared to the previous quarter, fell again in F3Q15. FTI’s share price, too, has continued to drop.
Revenues, which seemed to be stabilizing in fiscal 2Q15 compared to the previous quarter, fell again in fiscal 3Q15. Plus, FTI’s share price has continued to drop.
FTI’s moving averages
On December 21, FTI’s share price was at a 12.7% discount to its 50-day moving average (or DMA). It is trading 20.7% below its 200-day moving average.
Moving averages exhibit a smoother trend following the stock’s price movement. A 50 DMA is a short-term moving average (or MA), while a 200 DMA shows a long-term trend. Throughout the year, FTI’s stock price has been consistently below the short-run MA. The short-run MA has, in turn, been consistently below the long-run MA. This indicates the bearishness in FTI’s share price.
FTI’s stock currently faces the 50 DMA at $33 as a short-term upside resistance. Its 200 DMA is currently at $36.
Next, we will discuss what FTI’s management thinks about its outlook.