Halliburton (HAL): Don't hate'em, buy'em
It doesn’t matter how we analyze Halliburton (HAL), this stock is just plain cheap at $29 and change. While some have speculated their growth is about to end as the democrats takes control of Congress, we view this as a buying opportunity. By the way, the democrat issue has already been priced into the stock, thus HAL is trading at current level. If you are a “value investor”, meaning you’re the type that loves sound investment at inexpensive prices, this is the stock for you.
Despite the politics of oil, HAL’s drilling services will always be needed. There is very little competition in this area; not many companies can even come close to providing the type of services HAL is able in this sector. This stock is trading near its 52 week low and the funny thing is, business is great! Don’t worry about the oil prices dropping a few bucks here and there. Ask yourself this, will we ever see oil at $30 per barrel ever again? It is unlikely so…as crude oil prices remain high, HAL will continue to profit.
Another important factor to keep in mind, HAL still owns 80% of KBR (KBR just went public last month). HAL plans to sell the rest of KBR shares in April, which will probably result in about $3 billion in cash. Our prediction is HAL will use this proceed to buy back shares given it is so undervalued. When this share repurchase announcement comes, the stock will be in the mid 30s. Friends, this is an opportunity for us small investors to get it. Don’t pay attention to those talking heads, think independently. Our recommendation, buy HAL and hold it for about six months, you won’t be sorry. We strongly believed this stock will be in the high 40s by end of 2007. As always, we wish you the best!
Comments
Went in for 400 shares today at $29.30 Should have waited a little bit longer to make move. But I think ibooyah have a good point of this stock reaching to the mid $40's.
Posted by: Ron Mexico | January 5, 2007 12:29 PM
It's next to impossible to time or predict the bottom, if you buy it at this level, you'll probably make money in the long term.
Posted by: John Lee | January 5, 2007 03:02 PM
Wow. I can't believe Hal is down so much. What's going on? I guess I need to be more patience.
Posted by: Ron Mexico | January 11, 2007 02:37 PM
HAL's stock price is tied to oil. The past several week, oil has been in a decline. However, I believe HAL will recover once oil stabilize.
Posted by: Jack Maharaja | January 11, 2007 02:45 PM