June Free Stock Pick of the Month – Halliburton Company (NYSE: HAL)

Posted on 22 May 2012

Halliburton Stock HAL

Another value investment and spring stock pick that I am extremely hot on is the oilfield & drilling services titan, Halliburton Company (Current Price: 30.25 – NYSE: HAL – Current Quote).

Trading at just under $31/share, Halliburton is becoming extremely oversold and is currently available at an excellent price. Despite the recent dip in oil & natural gas prices, worldwide energy demand continues to rise over the long haul and Halliburton is one well-run company that will continue grow.

Halliburton has dropped along with big oil recently (parallel with the recent dip in oil & natural gas prices); but this is one company that we think will rebound at a tremendous pace; due to the fact that (unlike most of the Big Oil majors), Halliburton’s earnings/profits aren’t directly attached to price of oil & gas.

They netted over 627 million in the first quarter of 2012 and they are currently selling at a price almost 50% below their 52-week high. With a PE ratio of 9.14, an EPS of 3.19, and a Market Cap of almost 29 Billion, Halliburton is currently trading at 8 times the company’s earnings.

To put this into perspective, most fortune 500 companies will trade around 13-14 times their earnings (Note: The hot Social Networking IPO company, Facebook (NASDAQ: FB – Quote) is currently trading at price 100 times their earnings).

We are predicting and shooting for a target price of $40.00 (or a 30-35% increase) in the next 2 years. Halliburton still has fantastic earnings and plenty of room to grow.  And, once Oil and Natural Gas prices begin rising again (which they will eventually do), we see Hallibuton growing at a pace faster than the industry.

Halliburton Company (HAL) is a buy up to 33.25, especially for investors who are seeking long-term, value investments and want to put their money into a well-run company with continuous profits (even smaller investors).

(Note: I remain LONG on HAL at my purchase price of 31.50).

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