) hit a 52-week high of $57.42 on Feb 28. In fact, the Houston,
TX-based oilfield services behemoth has seen its stock price
climb some 14% year-to-date. This price appreciation can be
attributed to its superior business model, attractive
fundamentals and the ability to grow cash flow.
Why the Bullishness?
Halliburton is among the top three players in each of its
product/service categories, and is present in all major
hydrocarbon-producing regions of the world. The company, which
has surpassed earnings estimates in each of the last 5 quarters,
enjoys very strong relationships with both publicly-traded and
national oil companies worldwide.
Halliburton's international operations continue to reflect strong
demand for its services on the back of higher activity. This is
expected to be a key growth driver going forward with pricing in
the region remaining competitive. We have identified Latin
America - offering enough shale development opportunities - as
the important market in this regard. Additionally, despite
certain issues in Halliburton's core U.S. segment, the long-term
prospects for the business remain robust.
In September last, Halliburton got reprieve from the United
States Department of Justice (DOJ), when it closed its
investigation into the company's role in the Gulf of Mexico's
Macondo well disaster. We believe that the judge's acceptance of
Halliburton's guilty plea removes an overhang from the oilfield
service provider's future.
Finally, Halliburton's positive 'Analyst Day' update, together
with the recent increase in its quarterly dividend are other
pieces of positive news. While the Analyst Day conveyed the
world's second-largest oilfield services firm after
) intentions to outgrow the deepwater market by 25% over the next
3 years, the payout hike highlights Halliburton's commitment to
create value for shareholders.
Zacks Rank & Stock Picks
However, with Halliburton shares trading at 52-week high, any
upside from here may be limited, as suggested by the company's
Zacks Rank #4 (Sell).
Some better-ranked stocks in the 'Oilfield Services' sector
Emerge Energy Services L.P.
Willbros Group Inc.
). Both of them carry a Zacks Rank #1 (Strong Buy).
EMERGE ENRG SVC (EMES): Free Stock Analysis
HALLIBURTON CO (HAL): Free Stock Analysis
SCHLUMBERGER LT (SLB): Free Stock Analysis
WILLBROS GROUP (WG): Free Stock Analysis
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