Nabors Industries versus peers and the industry
Nabors Industries (NBR), one of the largest land-based drilling operators in the world, had a steady run in the stock market in 2016. On November 22, NBR was trading at $14.16. This was ~67% higher than its price in the beginning of the year.
What does Nabors Industries’ stock price movement tell us?
In the past year, Nabors Industries’ share price trended up since January 2016. This trend 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 service industry peers. Crude oil’s price recovery in 2016 partly explains NBR’s share price rise this year.
Nabors Industries’ moving averages
On November 22, Nabors Industries’ stock price was at an 18% premium to its 50-day moving average (or DMA). It was trading 44% 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 April. NBR’s stock price has exceeded its short-run MA since August. These indicate that NBR’s stock price is bullish.
In this series, we’ll analyze Nabors Industries’ growth prospects, its relation with industry drivers, and its free cash flow in this series. We’ll start with its management comments in the next part of this series.