National Oilwell Varco versus peers and industry
On December 11, 2017, National Oilwell Varco (NOV) was trading at $33.89, ~11% lower than its price at the beginning of 2017. National Oilwell Varco, which designs, manufactures, and sells equipment and components used in upstream energy production, had a tepid run in the stock market until August but has recovered since then.
The VanEck Vectors Oil Services ETF (OIH), an ETF tracking the index of 25 OFS companies, has fallen 28% year-to-date. Keane Group (FRAC), NOV’s smaller market cap peer, has gone down 30% during the same period. The West Texas Intermediate (or WTI) crude oil price has risen ~10% since the start of the year. NOV makes up 4.8% of OIH. Read more about US crude oil prices in Market Realist’s Crude Oil Prices Could End 2017 on a High Note. The Dow Jones Industrial Average (DJIA-INDEX) rose 23% year-to-date. The energy sector makes up 5.7% of the DJIA-INDEX.
What does NOV’s share price movement tell us?
Between December 12, 2016, and August 2017, National Oilwell Varco’s stock price trended down. Since then, it has risen to date. Improved quarterly revenues, reduced losses, and a decline in NOV’s net debt have eased some of the pressure on its stock price. In comparison, NOV’s oilfield equipment and services (or OFS) industry peer Baker Hughes’s, a GE Company (BHGE), stock price was 34% lower on December 11, 2017, compared to the beginning of 2017. Schlumberger’s (SLB) stock price was 24% lower during the same period.
National Oilwell Varco’s moving averages
On December 11, 2017, National Oilwell Varco’s stock price was at a 1.3% discount to its 50-day moving average (or DMA). It is trading 3% below its 200-day moving average. Moving averages exhibit a smoother trend following the stock’s price movement.
NOV’s short-run MA crossed over its long-run MA from above in early June 2017. NOV’s stock price has been below its short-run MA since November 2017, which indicates NOV’s stock is facing some headwinds.
In this series, we’ll analyze National Oilwell Varco’s growth drivers, the effect of industry drivers on NOV’s growth, its balance sheet, and its dividends. We’ll start the discussion with a look at the management’s perspective.