Halliburton’s returns and the industry
In the past year as of September 5, 2017, Halliburton (HAL) stock has fallen 9.0%. For an analysis of the factors affecting HAL, be sure to read Market Realist’s Will the International Slowdown Hurt Halliburton in 2017?
The Energy Select Sector SPDR ETF (XLE), the broader energy industry fund, has also fallen 9.0% in the past year. HAL outperformed the VanEck Vectors Oil Services ETF (OIH), which has generated -18.0% returns in the same period. Halliburton has underperformed the SPDR S&P 500 ETF (SPY), which has risen 12.0% during the same period. The Dow Jones Industrial Average (DJIA-INDEX) has risen 17.0% in the past year.
Crude oil price and US rigs
In the past year, the price of WTI (West Texas Intermediate) crude oil has recovered 8.5%. Read the latest on crude oil prices in Energy Sector Recap: August 25–September 1, 2017. Despite the recent weakness in crude oil prices, the US rig count increased 90.0% in the past year. Read how the top OFS (oilfield services and equipment) companies such as Schlumberger (SLB) and Weatherford International (WFT) have been performing in Market Realist’s SLB, HAL, NOV, WFT: How They Stack Up after 2Q17.
Halliburton’s strategies: Technology focus and acquisition
- On August 22, 2017, software giant Microsoft (MSFT) and Halliburton announced plans to enter into a strategic alliance to deliver intelligent cloud solutions in the energy upstream industry. HAL has already initiated real-time data streaming into Microsoft’s Azure computing platform.
- HAL plans to optimize its completion design using more technology as opposed to the technique of maximizing sand use and increasing production.
- HAL plans to lower the average sand pump per well.
- HAL plans to deploy capital and resources into unconventional plays and mature fields.
- HAL is seeking acquisition opportunities to augment its current portfolio in order to expand to areas where it doesn’t currently operate.
In this series, we’ll analyze what the market indicators are saying about HAL stock. We’ll also look at Wall Street’s recommendations for HAL. Let’s start with Halliburton’s historical valuation multiples.