Halliburton Hitting Paydirt

Halliburton Shares Set To Strike Oil

Halliburton is an oilfield-services company that engages in well drilling, completion, production and evaluation. With a market cap of $38 billion, Halliburton is the second-largest oilfield-services company in the world and a dominant player within North America.

The stock has fallen dramatically in recent months, mainly because oil proces have dropped. Fortuntately for investors, Halliburton has little to do with the price of oil, and does not benefit from huge increases or decreases. Drillers don’t stop drilling just because the price of oil drops from painfully expensive to plain old expensive. The production and drilling of oil continues, and that’s where Halliburton operates.

Halliburton is more of a technology play than a play on oil prices. Demand for the company's services is driven by the need for more oil and is not directly a function of the price of oil, or at least it shouldn’t be. Simply put, it is there to help the oil companies drill and improve efficiency. Halliburton is very good at what it does, in recent years its engineering capabilities, innovations and advancement have increased total production 75% and led to a 50% reduction in pumping times. One of its biggest technological advancements, horizontal drilling, is now being implemented by companies all over the world.

In addition to this, recent booms in domestic drilling in North America have led to a surge of new orders and new business generating billions in revenue. Halliburton continues to be on the rise and growing vastly. This year it's on pace to hire 11,000 new employees in America alone! All-around business is booming, and we believe the stock is cheap and a great value. Below are 10 reasons Halliburton is bullish and 10 reasons why you should invest:

10 Reasons to be Bullish on Halliburton:

PEG = 0.59. Halliburton holds a PEG ratio of 0.59, making it a bullish indicator as the lower the company's PEG ratio, the more cheaply valued it is. Companies with PEG ratios under 1 are undervalued -- another reason we believe Halliburton is a strong investment.

P/S = 1.83. Halliburton holds a P/S ratio of 1.83, a good valuation and strong indicator. Value investors look for P/S ratios under 2 as they show great opportunity. Another thing to consider is the fact that low P/S Ratios and rising stock prices tend to be a good basis to invest in growth stocks that have suffered a setback, something that definitely suits Halliburton, as it has been unfairly hit with share prices falling as much as 30% over the past few months as many investors correlating the fall in the price of crude oil and Halliburton’s share price too much. Over the course of the past decade, Halliburton’s P/S ratio has been below-average, making it a good indicator of value.

ROE = 20.7%. Halliburton’s return on equity averaged out over the past three years is 20.7% (22.49% in 2011), a strong indicator going forward, especially considering the fact that Halliburton plans to grow and further reinvest money within.

ROA = 12.55%. Equally impressive, Halliburton continues to show effective upper-level management with strong return on both assets and equity.

Forward P/E = 9.5. Halliburton sports a cheapish forward P/E of 9.5. That represents a discount to rivals like Baker Hughes (BHI) (10.1), National Oilwell (NOV) (11.5), and Schlumberger (SLB) (14.0).

92% analyst buy rating. Halliburton is highly regarded among Wall Street analysts, with 95% projecting the stock to outperform the S&P 500 going forward.

82.50% held by institutions. Halliburton is held by forty-two hedge funds. HAL represents 4% of T. Boone Pickens BP Capital’s portfolio' Ken Griffin’s Citadel holds more than 2 million shares; Ken Heebner holds a $170 million position; Jim Cramer holds it in his charitable trust.

$5.9 billion total revenue. Net income for the 2nd quarter of 2011 was reported at $747 million, vs. $483 million in the 1st quarter prior year. Total revenue’s improved to $5.9 billion from $4.4 billion in the same quarter last year. Operating income increased to $1.2 billion from $762 million in the June quarter of 2010 on the improving pricing environment and higher equipment utilization.

$1.4 billion cash balance. Halliburton currently is cash-flow-positive with a cash balance of $1.4 billion. Like we always say, “Cash is King!”

Dividend yield = 0.9%. It’s not much, but something is better than nothing, and a near 1% dividend yield is not bad especially considering the fact that Halliburton is such a high-growth, speculative stock to begin with.

Demand for Halliburton’s specialized services will continue to grow in the booming Oil & Gas industry. As the economy improves, so will Halliburton's prospects; expect revenue streams to increase too. With strong analyst coverage, upbeat projections, and the fact that HAL is now trading at 12.8 times 2011 earnings, we project Halliburton’s shares to rise to $75 per share, a total yield of 81%. Just like Schlumberger, the oilfield services specialty stocks are ready to explode.

BP -- Better Plans -- Maybe Success This Time

The latest attempt to stop oil from flowing into the Gulf is showing some promising signs.

BP's cap funneling oil to the surface-Coast Guard

Fri Jun 4, 2010 10:08am EDT

* Cap on leak, funneling fraction of oil to drillship

* BP hopes cap will eventually capture 90 pct of oil

HOUSTON, June 4 (Reuters) - BP Plc.'s containment cap over its stricken Gulf of Mexico well is collecting about 1,000 barrels per day, the top U.S. official overseeing the cleanup effort said on Friday.

A top BP executive overseeing containment efforts told CNN earlier that as that collection rate increases, it could corral "90-plus percent" of the oil.

One thousand barrels is a small fraction of the 19,000 barrels per day that the U.S. government has estimated could be gushing from the well, but the amount should increase as BP closes vents at the bottom of the cap to trap more oil, Coast Guard Admiral Thad Allen told reporters in a conference call.

"Sometime later today we'll probably be able to get ... an approximation of how much oil we are capturing," he said.

The containment cap is BP's latest attempt to trap oil, after its' "top kill" plan to plug the well failed on Saturday. BP's strategy is now to trap the oil at the well and funnel it to a tanker on the surface until it can drill a relief well to staunch the flow, which could take until mid-August.

Doug Suttles, BP's chief operating officer of exploration and production, told CNN earlier on Friday that the containment cap "should work."

"I'd like to see us capture 90-plus percent of this flow," Suttles said. "I think that's possible with this design."

Both Allen and Suttles said BP would continue working to seal the cap on jagged remnants of a pipe on equipment at the wellhead.

"Of course what we have to do is work through the next 24 or 48 hours to optimize that. But that would be the goal ... We want to stop this oil from spilling to the sea," Suttles said.

Suttles was the first BP official to publicly discuss the cap -- its latest attempt after a series of failures to try to contain a gushing oil and gas leak in the Gulf of Mexico.

BP spent Thursday lowering the cap onto the jagged remnants of a pipe that had been sheared from the top of equipment at the wellhead.

A rubber seal on the bottom of the cap is intended to capture most of the oil, but some is still expected to escape.

Meanwhile, drilling continues on two relief wells expected to intercept and plug the leaking well far beneath the seabed. Drilling began May 2 on the first relief well and May 16 on a second. Both are expected to be finished in August.