If you’re bullish on the future of fracking, Halliburton (HAL) should be near the top of your list. The oil services giant is the largest player in the fracking services marketplace with nearly $42 billion in market cap — and it has massive exposure to North America, from which it derived more than half its revenues last year.
The company’s strength in the shale oil/gas space cuts both ways, however: Recent oversupply has caused has prices to slip, although recovery is likely later this year and into 2014. A Justice Department antitrust probe of Halliburton and rival Baker Hughes is also a threat.
HAL’s fundamentals are compelling: The price/earnings-to-growth ratio of 0.67 and forward P/E of around 11 make it look cheap — even though it’s up more than 50% since November and trading near multiyear highs. HAL pays a nominal current dividend yield of 1.1%, but I like it more for the recent aggressive stock repurchases.