Anadarko’s moving averages
Anadarko Petroleum (APC) stock was mostly in a declining trend in the second half of 2015. However, since the start of 2016, APC has been mostly on an uptrend, mirroring the rally in crude oil prices (USO).
On February 26, 2016, APC crossed its 50-DMA (day moving average) for the first time in 2016. Things started looking up at the end of 1Q16 when crude oil prices (USO) started recovering. In fact, APC stock crossed over its 50-DMA in March. In early June, it crossed over its 200-DMA as well.
Soon after the Brexit vote, however, APC fell under its 50-DMA following a sharp drop in its stock price. But it was quick to recover, and as of July 1, 2016, APC stock was trading ~6.5% above its 50-DMA and 6.3% above its 200-DMA.
As you can see in the above graph, it’s clear that APC’s 50-DMA is about to cross over its 200-DMA. This would be a bullish sign for the stock.
A quick earnings review and peer comparison
Anadarko reported its 1Q16 earnings on May 2, 2016. Its 1Q16 revenue was $1.7 billion against the estimate of $1.8 billion. Revenue in 1Q15 was ~$2.7 billion against $2.1 billion in 4Q15.
The company announced adjusted EPS (earnings per share) of -$1.12. Wall Street analysts’ consensus estimate for EPS was -$1.16.
By comparison, upstream peers Apache (APA), EP Energy (EPE), and Newfield Exploration (NFX) reported 1Q16 adjusted EPS of -$0.40, $0.19, and $0.09, respectively. APC, APA, and NFX make up ~11% of the iShares US Oil & Gas Exploration & Production ETF (IEO).
Next, let’s look at Anadarko’s profit margin and revenue trends.