Nabors Industries versus industry ETF
Nabors Industries (NBR) is one of the largest land-based drilling rig operators in the world. The company also provides offshore platform workover and drilling rigs. Its share price trended downward in the stock market in 2015. On January 5, 2016, NBR was trading at $8.47. This was a 30% fall from its price a year ago.
The VanEck Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 OFS (oilfield services) companies, has fallen 25% in the past year. Noble Corporation (NE), NBR’s smaller market cap peer, has fallen 35% during the same period.
Compared to NBR’s $2.8 billion market capitalization, NE’s market capitalization currently stands at $2.5 billion. NBR makes up 3.2% of OIH. The entire OFS industry has been negatively affected by the energy price crash since June 2014.
What does NBR’s share price movement tell us?
On March 24, 2015, NBR’s completion and production services business was combined with C&J Energy Services (CJES). NBR received $688 million in exchange for its 47% share in the completion and production services business. NBR’s share price was at its one-year high of $16.70 by April’s end.
However, NBR’s share price started trending downward after that, as its financial performance deteriorated quarter-over-quarter until fiscal 3Q15. It reached its one-year low of $7.73 on December 21, 2015. Since then, NBR’s share price has recovered 10% as of January 5, 2016.
NBR’s moving averages
On January 5, Nabors Industries’ share price was at a 10.5% discount to its 50-day moving average. It is trading 29.7% below its 200-day moving average.
Moving averages exhibit a smoother trend following a stock’s price movement. A 50-day moving average is a short-term moving average, while a 200-day moving average shows a long-term trend.
Except for a brief period in June 2015 when the two technical indicators collided, NBR’s short-term moving average was below its long-term moving average throughout fiscal 2015. This indicated the bearishness in NBR’s share price. NBR’s share price, however, crossed over its short-term moving average a few times in the past year and is currently very close to its short-term moving average.
NBR’s stock currently faces a 50-day moving average of $9.5 as a short-term upside resistance. Its 200-day moving average is currently at $12.1.
Next, we’ll discuss what NBR’s management thinks about its outlook.