Weatherford International (NYSE: WFT) provides
equipment and services for the drilling and production sectors of the oil and gas industry. The firm specializes in contract drilling, formation evaluation, well installation/completion systems, "fishing" services, oil recovery, and pipeline services. The company operates in over 100 countries and employs approximately 40,500 people worldwide. Halliburton Company (NYSE: HAL) and Schlumberger Limited (NYSE: SLB) are competitors.
The stock popped with the sector last Friday, when crude oil concluded a six percent weekly gain with its fourth new closing high. On Monday, the firm reported essentially in-line first quarter results and announced a 2-for-1 stock split (payable May 23).
The news
was good, but WFT shares pulled back slightly, as they began to consolidate the previous week's gain in a bullish "flag" pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with nine "strong buys", nine "buys" and four "holds". Analysts see a 28% growth rate, through the next year. The WFT Price to Book ratio (3.92) and EPS Growth rate (23.17%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $47.48 and $85.57. A stop-loss of $71.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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