Oil Services Stocks: 12 Holds, 1 Sell

TheStreet.com

NEW YORK (TheStreet) -- So far in 2013, crude oil has formed a trading range between its Jan. 31 high at $98.24 and its April 18 low at $85.61. As a result of this range-bound trading the oils-energy sector became the cheapest of the 15 overvalued sectors, being overvalued by 6.2%.

Back on April 4, I wrote, Oil Services Stocks: Hold 'Em or Fold 'Em? In this post, I profile the 25 stocks in the Market Vectors Oil Services ETF. OIH has also set a trading range down from $45.12 on Feb. 14 to $39.42 on April 17. Today I profile updates for 13 of the oils services stocks. Each of these stocks still have the same ratings as on April 4 -- 12 rated hold and one rated sell.

The daily chart for Nymex Crude Oil ($93.11) shows declining momentum with the 21-day, 50-day and 200-day simple moving averages (SMA) at $92.89, $93.16 and $92.14. My monthly and quarterly value levels lag at $88.34 and $79.66, with a weekly pivot at $93.82 and annual risky level at $115.23.



Chart Courtesy of Thomson/Reuters

The stock market continues to trade higher, despite the ValuEngine Valuation Warning, which intensified this morning. Today we show that 70.9% of all stocks are overvalued and that 32.4% are overvalued by 20% or more. The yield on the 30-Year U.S. Treasury bond is up 10 basis points so far this week, to 3.191%.

Reading the Table

OV / UN Valued -- The stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating -- A "1-Engine" rating is a strong sell, a "2-Engine" rating is a sell, a "3-Engine" rating is a hold, a "4-Engine" rating is a buy and a "5-Engine" rating is a strong buy.

Last 12-Month Return (%) -- Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast 1-Year Return -- Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the Table are projected to move higher by that percentage over the next 12 months.

Value Level: is the price at which to enter a GTC Limit Order to buy on weakness. The letters mean; W-Weekly, M-Monthly, Q-Quarterly, S-Semiannual and A- Annual.

Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: This is the price at which to enter a GTC Limit Order to sell on strength.

Baker Hughes ($46.58 vs $44.53 on April 4) beat EPS estimates by 3 cents, earning 65 cents on April 19. The weekly chart profile is positive, with the five-week modified moving average (MMA) at $45.61 with the 200-week simple moving average (SMA) at $49.48. My weekly value level is $43.22 with a semiannual risky level at $61.19.

Cameron International ($63.46 vs $62.00 on April 4) missed EPS estimates by 4 cents, earning 70 cents on April 25. The weekly chart profile is neutral with the five-week MMA at $62.44. My weekly value level is $58.23 with a monthly pivot at $63.61 and semiannual risky level at $70.27.

Diamond Offshore Drilling ($70.36 vs $67.38 on April 4) beat EPS estimates by 12 cents, earning $1.27 on April 25. The weekly chart profile stays positive with a close this week above the five-week MMA at $69.49. My weekly value level is $67.52, with a monthly pivot at $71.77 and semiannual risky level at $81.34.

Halliburton ($44.20 vs $38.75 on April 4) beat EPS estimates by a dime, earning 67 cents on April 22. The weekly chart profile stays positive with a close this week above the five-week MMA at $41.43. My weekly value level is $39.46, with a monthly pivot at $43.28 and annual risky level at $45.72.

Nabors industries ($15.93 vs $14.89 on April 4) beat EPS estimates by 4 cents, earning 33 cents on April 23. The weekly chart profile shifts to positive with a close this week above the five-week MMA at $15.70. My weekly value level is $13.96, with a monthly pivot at $15.43 and annual risky level at $18.49.

Noble ($39.64 vs $36.17 on April 4) beat EPS estimates by 2 cents, earning 59 cents on April 17. The weekly chart profile stays positive with a close this week above the five-week MMA at $38.29. My weekly value level is $38.01 with a semiannual risky level at $46.67.


National Oilwell ($68.04 vs $67.98 on April 4) missed EPS estimates by 8 cents, earning $1.29 on April 26. The weekly chart profile stays positive with a close this week above the five-week MMA at $67.64. My weekly value level is $64.90 with a semiannual risky level at $92.10.

Oceaneering International ($73.95 vs $63.92 on April 4) beat EPS estimates by a dime, earning 69 cents on April 23. The weekly chart is positive but overbought with the five-week MMA at $68.25. My weekly value level is $69.51, with a semiannual risky level at $74.04.

Rowan Companies ($34.89 vs $32.92 on April 4) beat EPS estimates by 3 cents, earning 55 cents on May 1. The weekly chart stays positive with a close this week above the five-week MMA at $33.91. My weekly value level is $31.60 with an annual pivot at $35.13 and annual risky level at $36.66.

Transocean ($55.07 vs $49.92 on April 4) missed EPS estimates by 8 cents, earning 93 cents on May 8. The weekly chart stays positive with a close this week above the five-week MMA at $52.63. My weekly value level is $50.15 with a semiannual risky level at $66.07.

Schlumberger ($76.86 vs $74.01 on April 4) beat EPS estimates by 2 cents, earning $1.01 on April 19. The weekly chart stays positive with a close this week above the five-week MMA at $75.56. My monthly value level is $74.83 with a semiannual risky level at $94.62.

Tidewater ($55.62 vs $49.50 on April 4) remains sell rated and reports quarterly results on May 21. The weekly chart is positive, but overbought with the five-week MMA at $52.19. My semiannual value level is $53.55 with a weekly pivot at $54.71 and annual risky level at $59.59.

Weatherford International ($13.46 vs $12.04 on April 4) matched EPS estimates, earning 15 cents on May 2. The weekly chart stays positive with a weekly close above the five-week MMA at $12.84 with the 200-week SMA at $16.22. My monthly value level is $12.36 with a weekly pivot at $13.01 and semiannual risky level at $20.69.

Ten of the stocks profiled above are up by 10% or more over the last 12 months, and all are projected to move sideways to down over the next 12 months. Two are trading below their 200-day SMAs, so the remaining seven have risk of reversion to the mean. My suggested strategy with this configuration is to sell strength on these names.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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