Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Nov 11, 2019
Oil Service Sector stocks showing extreme risk, poor fundamental ratings

Oil Service Sector stocks showing extreme risk, poor fundamental ratings

Most of the big oil services companies have reported earnings already for the third quarter. The sector has been trending higher over the last month as those earnings reports have been released, but many of the stocks are now in overbought territory based on their daily stochastic readings. On November 7, four of top six holdings in the VanEck Vectors Oil Services ETF (NYSE: OIH) appeared on a bearish scan that I run each night. One of the factors in the scan is a bearish crossover from the stochastics and that the readings are at or near overbought territory.

We see on the daily chart of the OIH that was in overbought territory before the indicators turned lower in the past week.

The four holdings of the OIH that appeared on my bearish scan were Halliburton (NYSE: HAL), Helmerich & Payne (NYSE: HP), National Oilwell Varco (NYSE: NOV), and Schlumberger (NYSE: SLB). I took those four stocks and ran them through Tickeron’s Screener in order to see how the companies were doing on a fundamental basis. The results were not good. We see in the table below that all four get Profit vs. Risk rating scores of 100 and that is the worst possible score a stock can get. The SMR ratings from Tickeron are all in bottom 10% of ratings. Halliburton and Helmerich & Payne both have Price/Growth ratings in the bottom 20% while Schlumberger’s rating is in the bottom quartile of readings.

The only ratings that are positive are the Valuation ratings for Helmerich & Payne, Halliburton, and Schlumberger. The highest rating in any category for all of the ratings is the P/E Growth rating for Helmerich & Payne.

I also ran the stocks through Investor’s Business Daily’s ratings system and what came out was more of the same—lots of poor readings and only one really positive reading. The lone rating in the top quartile was Helmerich & Payne’s EPS rating at 76. The SMR ratings for Halliburton and Helmerich & Payne are average. All of the other readings are below average with many of them being in the bottom 20% – those are designated with the red highlights. 

The one category from IBD that isn’t a fundamental indicator is the Relative Price Strength rating. We see that Halliburton and Helmerich & Payne both rank in the bottom 20% in this category which measures the stock’s price performance against all other stocks for the past year. National Oilwell Varco and Schlumberger fare a little better, but they are both still in the bottom quartile in terms of price performance.

To complete the analysis process that I use, I looked at the sentiment indicators for all four of the stocks. What I found was that despite the poor fundamentals and the downward trends in the stocks, there were still a few extremely optimistic sentiment indicators.

Halliburton’s buy percentage is at 86.2% with 25 of 29 analysts rating the stock as a “buy”. Schlumberger’s buy percentage is in the average range while National Oilwell Varco and Helmerich & Payne show a little bit of pessimism toward the stock with buy percentages that are below average. Remember we view sentiment from a contrarian viewpoint so seeing below average readings is a positive sign for the stock.

As for the short interest ratios for these four companies, Schlumberger’s is low at 1.9 and that is a concern. Halliburton’s ratio is in the average range and Helmerich & Payne and National Oilwell Varco have short interest ratios that are slightly higher than average. Again that is a positive sign that the ratios are above average.

Overall, the oil service sector looks like a pretty risky bet at this point in time. Of these four stocks, only National Oilwell Varco hasn’t reported earnings yet, so I wouldn’t look to earnings as a catalyst that helps improve the fundamental picture.

Related Tickers: OIH
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

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Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

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However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

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Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
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Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.