uploads/2017/01/Returns-OFS-2-1.png

What’s behind Oilfield Services Stocks’ High Implied Volatilities?

By

Updated

Oilfield services stocks with high implied volatilities

Tidewater (TDW) has fallen 31.7% in the past year. It has the highest implied volatility of all the oilfield services companies that make up the VanEck Vectors Oil Services ETF (OIH). In the past five days, Tidewater fell 0.6%.

The above table shows the one-year and last-five-day returns of the stocks we identified in the previous part as having high and low implied volatility. Generally, high implied volatility stocks either fell or moved more sharply than did low implied volatility stocks.

While Noble (NE) rose the most among the oilfield services stocks with high implied volatility, in the last five days, Seadrill (SDRL) lost the most over this period. Weatherford International (WFT) 6.2% rose and Carbo Ceramics (CRR) fell 4.2% in the past five days.

Seadrill (SDRL) rose the most in the past year among the list of high implied volatility oilfield services stocks. In the past four quarters, Seadrill’s revenue fell 22.5%, while its operating income rose 59.2%.

Article continues below advertisement

Carbo Ceramics (CRR) fell the most in the past year among the list of high implied volatility oilfield services stocks. In the past four quarters, Carbo Ceramics’ revenue fell by  73.3%, while its operating income rose more than 60%. Carbo Ceramics’ operating profit margin is -97.9%, as compared to the industry median of -3.3%.

Returns of oilfield services stocks with low implied volatilities

Schlumberger (SLB) has the lowest implied volatility of all the OFS companies that are part of OIH. Schlumberger rose the least in the past year among the list of low implied volatility oilfield services stocks. In the past four quarters, Schlumberger’s revenue fell 9.1%, while its operating profit rose 1.2x. Its operating profit margin is 10.1%, as compared to the industry median of -3.3%.

Tenaris (TS) rose the most in the past year. In the past four quarters, TS’s revenue fell 26.2%, while its operating income rose by 96%. TS’s operating profit margin is 0.3%, as compared to the industry median of -2.9%.

In the next and final part of this series, we’ll look at the oilfield services stocks with the highest short-interest-to-equity float ratios.

Advertisement

More From Market Realist