Weatherford International versus peers, industry
Weatherford International (WFT) is an oilfield equipment and services (or OFS) company with operations around the world.
On March 1, 2017, Weatherford International was trading at $5.84, a ~6% fall compared to the previous year. Oil States International (OIS), WFT’s smaller market cap peer, rose 40% during the same period.
The Market Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 OFS companies, has risen 34% since the beginning of 2017. The entire OFS industry has been negatively affected by the energy price crash that began in June 2014.
However, crude oil’s price has recovered 59% in the past year. Read Crude Oil: Analyzing Fundamental Drivers for March 2017 to know more about crude oil price. Crude oil’s partial recovery has also benefited Schlumberger’s (SLB) and Flotek Industries’ (FTK) stock prices.
What does Weatherford’s stock price movement tell us?
In the past year, Weatherford International’s stock price trended down until March 1, 2017. Although WFT’s quarterly revenue held relatively steady in the past three quarters, its earnings in the past several quarters stayed persistently weak, largely due to weak demand for OFS products and services. Its cash flows, which remained negative in the three quarters leading up to 3Q16, improved in 4Q16.
Weatherford International’s moving averages
On March 1, Weatherford International’s stock price was at a 5.6% premium to its 50-day moving average. It was also trading 5% above its 200-day moving average.
Moving averages exhibit smoother trends following a stock’s price movements. A 50-day moving average is a short-term moving average, while a 200-day moving average shows a long-term trend.
WFT’s short-term moving average has closely coincided with its long-term moving average since the last week of February 2017. WFT’s stock price has also stayed above its long-term moving average since the beginning of February 2017, indicating that WFT’s stock price is gathering strength.
In this series, we’ll analyze Weatherford International’s top and bottom line growth, its various industry growth drivers, and its balance sheet. We’ll start with its management’s comments in the next article.