Yahoo Finance What Does Weatherford International’s Share Price Movement Say?
Weatherford International Is Stumbling in a Weak OFS Industry
Weatherford International versus peers and industry
Weatherford International (WFT) is an oilfield services (or OFS) company with operations in more than 100 countries. On February 29, 2016, Weatherford International was trading at $6.40. This was 50% below its price a year ago.
The Market Vectors Oil Services ETF (OIH), which tracks 25 OFS companies, has fallen 31% in the past one year. Seadrill (SDRL), WFT’s smaller market cap peer, has fallen 81% during the same period. WFT is 3.8% of OIH. The entire OFS industry has been negatively affected by the energy price crash since June 2014.
What does WFT’s share price movement tell us?
Weatherford International’s share price has trended downward since May 2015. WFT’s quarterly revenues and earnings in the past four quarters persistently stayed weak, largely due to the energy price depression and weak demand for OFS products and services.
Weatherford’s moving averages
On February 29, Weatherford International’s share price was at an 8.7% discount to its 50-day moving average (or DMA). It’s trading 36% below its 200-DMA.
Moving averages exhibit a smoother trend following a stock’s price movement. A 50-DMA is a short-term MA (moving average), while a 200-DMA shows a long-term trend. WFT’s short-run MA has been below its long-run MA from June 2015 until now. WFT’s share price has also stayed below the long-run MA throughout the past one year. This indicates bearishness in WFT’s share price.
In this series, we’ll analyze some of Weatherford International’s fundamental metrics to see why its share price has been weak. We’ll look at its top-line and bottom-line growth, its balance sheet, and its valuation multiples.
Let’s start by looking at management’s comments in the next part.
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