In this time of worldwide economic turmoil, the largest companies will grow throughout the crisis and the smaller players will need to be well positioned to produce equal risk-adjusted returns. Halliburton is the second-largest Oil & Gas Equipment & Services company, behind Schlumberger. With the price of oil above 100$, the Houston-based company's segment faces increasing demand. The oil-rich countries are often forced to work with the largest infrastructure companies like Halliburton because of the size of the projects. The lower oil prices have pushed the stock to lower levels, making the market capitalization plummet by roughly fifteen percent. Considering that Halliburton has proved to be able to be profitable with oil barrel under 40$, I feel very confident that the management will be able to keep the company expanding and improving shareholder value. The price is getting stronger after the big pullback we have seen in the last weeks and the stock is still ~+20% YTD and the interest for the stock is still there. Institutions are all holding some of Halliburton because of the leading-role it play in the worldwide oil projects execution. I don't see oil consumption drop significantly and the world need Haliburton's expertise and large scale capacity to increase oil production at least as fast as demand. Hal's contracts don't get done in a night and you can't cancel them in this time frame either, the daily barrel price movement doesn't not influence revenues at Halliburton as it does on ExxonMobil's sheet. In a couple of words, Halliburton has plenty of demand for it's services and the stock has strong chances to outperform the weak market throughout the next year.
$45.77 (08/27/08)
