Fool Article on Haliburton
I wasn't aware of any company specific reason to like HAL over SLB, but this article gives some reasons why HAL has lagged the big three, the other one being BHI.
http://www.fool.com/investing/value/2007/11/29/halliburton-a-strengthened-oil-competitor.aspx
If OPEC doesn't increase production quotas at its meeting next week as expected, I believe crude oil prices will go upwards. Today crude is down below $90 for the first time in a few weeks. The ride should be scary because of all those 'speculators' and 'hedgies' driving up the price of crude beyond what the marginal cost of production is. The fact is that the marginal cost of production is increasing.
I say we use the anticipated volatility to pick up on some of these international oil service companies.
Labels: BHI, HAL, oil service, SLB
posted by Des @ 11/30/2007 09:46:00 AM
3 Comments:
I had to follow the link to the other Fool article on why SLB is the 800 gorilla. What time frame and how much are you planning to buy HAL/SLB/OIH?
Oil closed below $89 and with worries about a recession in the US, this may be enough for the long 'speculators' to exit the oil markets in which case the service companies may come cheaper.
In terms of holding period, the decline rates of existing oil fields dictates stable and growing needs for service companies, so I would consider it a long time holding.
I have no preference in terms of company and I would buy some of each of the trifecta, but buying only the industry leader SLB would be OK.
I like buying the market leader in a correcting market. Why don't we say you have $5K to pick up one/two of those companies in the upcoming weeks. You're most in tune with that market so feel free to time a good entry price.
So what to do with the rest: I think the other options were US Banks and Emerging Market plays.
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