FMC Technologies versus industry ETF
FMC Technologies (FTI) is one of the most well-known US oilfield equipment and services (or OFS) providers in the United States. Its stock has fallen so far in 2016. On June 14, 2016, FTI was trading at $26.73. This was ~9% lower than its price at the beginning of the year.
The VanEck Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 OFS companies, has risen by 9% in 2016. Weatherford International (WFT), FTI’s market capitalization peer, has fallen by 25% in the same period. Compared to FTI’s $6.1 billion market capitalization, WFT’s market capitalization is ~$5.8 billion. FTI makes up 4.3% of OIH. Crude oil’s price has risen by 33% since the beginning of the year.
What FMC Technologies’ share price movements tell us
In the past year, FTI’s share price started at a high of ~$42.4 and has trended downward until now. FTI’s net income fell in the four quarters leading up to 1Q16. Quarter-over-quarter, FTI’s net income fall accelerated in 1Q16.
FTI’s revenue, which was relatively resilient, fell considerably in 1Q16. FTI’s share price, too, has underperformed the crude oil price recovery in 2016.
FTI’s moving averages
On June 14, FTI’s share price was at a 5% discount to its 50-day moving average. It was trading 8.6% below 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.
FTI’s stock price stayed above its short-term moving average from March until the second week of May 2016 before it lost steam. Its short-term moving average has consistently been below its long-term moving average. This indicates bearishness in FTI’s share price.
On May 19, 2016, FTI announced its proposed merger with European OFS giant Technip. However, FTI’s share price didn’t rally following the merger news. Read more on the proposed merger in Market Realist’s FMC Technologies and Technip to Form Energy Services Giant.
Next, we’ll discuss what FTI’s management thinks about its outlook.