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Does Nabors Industries’ Share Price Still Look Strong?

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Dec. 4 2020, Updated 10:52 a.m. ET

Nabors Industries versus peers and industry

Nabors Industries (NBR), one of the largest land-based drilling operators in the world, has had a steady run in the stock market in 2016. On August 22, NBR was trading at $9.9, which was ~15% higher than its price at the beginning of the year.

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What does Nabors Industries’ share price movement tell us?

Nabors Industries’ share price has been trending up since January 2016. This was despite NBR’s quarterly revenues and net income staying persistently weak in the past four quarters. Its cash flow has also decreased in the past three quarters, but has been relatively resilient compared to many of its oilfield services industry peers. Crude oil price’s recovery in 2016 partly explains NBR’s share price rise this year.

Nabors Industries’ moving averages

On August 22, Nabors Industries’ share price was at a 2% premium to its 50-day moving average (or DMA). It was trading 12% above its 200-day moving average.

Moving averages exhibit a smoother trend following the stock’s price movement. A 50 DMA is a short-term MA, while a 200 DMA shows a long-term trend. NBR’s short-run MA has crossed over its long-run MA since the last week of May. NBR’s share price has gone above its short-run MA since the beginning of June. These figures indicate that NBR’s share price is bullish.

In this series, we will analyze Nabors Industries’ top-line and bottom-line growth, its relationship to industry drivers, free cash flow, net debt, and its valuation multiples. We will discuss its management’s comments in the next part.

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