Helmerich & Payne versus peers and industry
Helmerich & Payne (HP) is one of the leading contract drillers in the United States. On May 18, 2016, HP was trading at $57.88. This was 6.8% higher than the beginning of the year.
The VanEck Vectors Oil Services ETF (OIH), which tracks 25 OFS (oilfield services) companies, has increased 1% year-to-date. HP makes up 4.2% of OIH. National Oilwell Varco (NOV), HP’s larger market cap peer, has decreased 9% during the same period. WTI (West Texas Intermediate) crude oil price has recovered 31% from January 1, 2016.
What does Helmerich & Payne’s share price movement tell us?
Helmerich & Payne’s share price has trended downward since early May 2015. HP’s quarterly revenues in the past four quarters persistently stayed weak. Its net income and cash flow improved in fiscal 1Q16 over the previous quarter. Since the third week of January, when HP’s share price reached its one-year low, it has recovered 35%.
Helmerich & Payne’s moving averages
On May 18, 2016, Helmerich & Payne’s share price was at a 4% discount to its 50-day moving average. However, HP was trading 5% above its 200-day moving average.
Moving averages exhibit a smoother trend following the stock’s price movement. A 50-day moving average is a short-term moving average. A 200-day moving average shows a long-term trend. HP’s short-run moving average stayed below its long-run moving average until the second week of April. Its share price is also trading above its long-run moving average since the beginning of March. This reflects a bullishness in HP’s share price. However, HP’s short-run moving average has been trading above its share price since the second week of May. This indicates HP’s share price is facing some headwind.
In this series, we’ll look at Helmerich & Payne’s top-line and bottom-line growth, free cash flow, dividends, and valuation multiples. Let’s start by looking at the company’s management comments.