Superior Energy Services versus peers and the industry
Only July 1, Superior Energy Services (SPN) was trading at $18.99. This price was ~40% higher than its price at the beginning of 2016.
The VanEck Vectors Oil Services ETF (OIH), an ETF tracking index of 25 oilfield service companies, has risen 12% since January 1. SPN is 3.1% of OIH. McDermott International (MDR), SPN’s smaller-market-cap peer, has risen 51% during the same period.
What does SPN’s share price movement tell us?
In the past year, Superior Energy Services’ share price trended down from July 2015 to January 2016. SPN’s quarterly revenues and net income in the past four quarters stayed weak. West Texas Intermediate (or WTI) crude oil prices have risen 33% since the beginning of this year. The crude oil price recovery in 2016 partly explains the rise in SPN’s share price this year. The entire oilfield services industry has been negatively affected by the energy price crash since June 2014.
Superior Energy Services’ moving averages
On July 1, Superior Energy Services’ share price was at an ~11% premium to its 50-day moving average (or DMA). It’s also trading 34.7% above its 200-day moving average.
Moving averages are showing a smoother trend following the stock’s price movement. A 50 DMA is short-term while a 200 DMA shows a long-term trend. SPN’s short-run moving average surpassed its long-run average in the second week of May. SPN’s share price surpassed its short-run MA in the first week of March, and it’s been trading above its long-run average since the second week of April. This trend indicates that SPN’s share price has gathered momentum.
In this series, we’ll analyze Superior Energy Services’ top-line and bottom-line growth, free cash flow, balance sheet, dividend, and valuation multiples. We’ll start with its management comments in the next part.