Energy stock Halliburton is Thursday's pick for IBD 50 Growth Stocks To Watch. The oil services stock is nearing a buy point as crude oil prices remain firm.
Energy stocks have benefited from the increase in crude prices. The West Texas Intermediate crude futures topped $95 Wednesday, near a 52-week high. In addition, on Wednesday the Energy Information Administration said U.S. crude inventories fell 2.2 million barrels last week, tightening supply.
Halliburton shares gained about 27% this quarter vs. the S&P 500's loss of 4%.
The oil services company provides exploration, drilling, production and well construction services in over 70 countries.
Halliburton shares the No. 1 ranking out of 30 stocks in the Oil & Gas Field Services group. The group swiftly jumped to No. 2 out of the 197 IBD industry groups from No. 36 four weeks ago and boasts a best-possible 99 IBD Relative Strength Rating.
HAL, SLB Lead Top-Rated Oil & Gas Names
| Company | Symbol | Comp Rating | EPS Rating | RS Rating | SMR Rating | A/D Rating |
|---|---|---|---|---|---|---|
| Halliburton | HAL | 99 | 86 | 95 | A | B |
| Liberty Energy | LBRT | 99 | 79 | 96 | A | A |
| Oceaneering International | OII | 99 | 81 | 99 | C | A- |
| ProPetro | PUMP | 99 | 81 | 94 | C | B |
| Schlumberger | SLB | 99 | 89 | 94 | A | B- |
Energy Stock Nears A Buy Point
HAL stock inched higher on Thursday after Wednesday's 3% pop. It is nearing the 43.42 buy point of a long, deep cup-with-handle base, according to MarketSmith pattern recognition. The entry point is also the 52-week high, hit on Jan. 18.
The stock climbed sharply from May's lows and has found support at its 50-day moving average since late June. Volume has trended light in the stock's most recent dip. The relative strength line has also been robust.
Its Accumulation/Distribution Rating is a high A, on a scale of A through E, showing heavy institutional buying over the last 13 weeks. Its 1.1 up/down volume ratio shows more demand in buying over selling in the last 50 days.
Oil Services Outlook
Halliburton reported better-than-expected second-quarter earnings, but lower sales on July 19. Profit growth slowed to 57% after three quarters of 100% or more.
Its 14% revenue growth slowed following several quarters of over 30% increases. North America made up 47% of its revenue, while the Middle East and Asia was 24%, Latin America 17%, and Europe and Africa 12%.
The company is committed to increasing its free cash flow. "Our strong cash flow generation gives me confidence in our ability to return more cash back to shareholders as evidenced by the $248 million of share repurchases this quarter," said Jeff Miller, Halliburton chairman, president and CEO, in the earnings release. The company pays a modest 1.5% dividend yield to investors.
The oil services company reports Q3 earnings on Oct. 24. Analysts expect 40% full-year EPS growth this year and 14% next year, according to MarketSmith data. Haliburton holds a top-notch 99 Composite Rating and a 95 Relative Strength Rating, according to IBD Stock Checkup.
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