National Oilwell Varco’s implied volatility in context
On January 18, National Oilwell Varco’s (NOV) implied volatility (or IV) was ~30%. Its 3Q17 earnings were announced on October 26. Since then, its implied volatility has remained nearly unchanged at around this level. Since October 26, NOV’s stock price has increased 12%. During the same period, the Vanguard Energy ETF (VDE) has increased 15%. NOV is 0.89% of VDE.
Stock price forecast for National Oilwell Varco
Given National Oilwell Varco’s implied volatility, and assuming a normal distribution of stock prices and one standard deviation probability of 68.2%, NOV’s stock will likely close between $39.49 and $36.33 in the next seven days. NOV’s stock price was $37.91 on January 18.
Implied volatility: Comparison with peers
Helmerich & Payne’s (HP) implied volatility was ~34% on January 18, which implies HP’s stock price can range between $73.33 and $66.73 in the next seven days. Helix Energy Solutions’ (HLX) implied volatility was ~51% on January 18, which implies HLX’s stock price can range between $8.60 and $7.46 in the next seven days. McDermott International’s (MDR) implied volatility was ~43% on January 18, which implies that MDR’s stock price could vary between $8.26 and $7.34 in the next seven days. To compare oilfield services companies’ free cash flow comparison, see Market Realist’s The 5 Worst Oilfield Companies by Free Cash Flow.
Next in this series, we’ll discuss whether investors have shown interest in NOV’s stock, as indicated by its short interest.