Why Halliburton (HAL), Transocean (RIG) and EOG Resources (EOG) Are Today’s 3 Worst Stocks

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The stock market, coming off its best week in almost two years, began Monday on a sluggish note; About 55% of public companies finished in the red today.

Although the bearishness generally wasn’t too severe, energy companies — especially oil and gas companies — caught the brunt of the selling.

halliburton company transocean ltd eog resources inc todays worst stockNot surprisingly, then, all three of Monday’s most notable laggards were oil and gas stocks. Today we mourn the declines of Halliburton (HAL), Transocean (RIG), and EOG Resources (EOG) stock.

Halliburton (HAL)

Just last week, the oil exploration, development, and production company Halliburton reported absolutely stellar third-quarter results. Earnings per share came in at $1.41 — up a whopping 70% — on revenue of $8.7 billion. Analysts were looking for EPS of $1.10 and sales of $8.53 billion.

So how did the HAL stock price respond? Well, since that remarkable third-quarter report a week ago, HAL shares are actually slightly in the red, aided mightily by today’s 6.1% decline. Although Halliburton hasn’t yet reported anything monumentally disappointing, the steady decline of crude oil prices isn’t good for oil produces like Halliburton any way you cut it, and Wall Street is punishing shares proactively for slipping energy prices.

Transocean (RIG)

Shares of the offshore contract oil driller Transocean also took a hit today, falling 5.6%. RIG stock as crude oil prices flirted with the $80 per barrel level. Goldman Sachs didn’t help matters for Transocean bulls when the investment bank issued a bleak outlook for oil prices — projecting $75/barrel oil in the U.S. for the first quarter and second half of 2015.

Since oil’s 52-week high just below $104 a barrel in June, prices have fallen more than 30% to current levels near $80 a barrel. Great news for consumers at the pump every day, but not the best news for stocks like RIG and HAL. RIG stock fell in tandem with oil prices over that period, slumping about 35% in that time.

EOG Resources (EOG)

EOG Resources differs from RIG and HAL in that it’s more focused on natural gas than the other two names. Unfortunately, and as EOG investors are well-aware, natural gas prices have also been depressed recently. That said, EOG shareholders are probably eager for winter, when the demand for natural gas enjoys a seasonal spike due to heating demands.

That hasn’t happened yet. Shares of EOG Resources tumbled 4% as natural gas prices fell an additional 1.7% today to $3.56/million BTU, off more than 40% from its 52-week high at $6.15/million BTU. If you believe sheer demand could set a floor for natural gas price, now might be a time to consider EOG stock.

As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/halliburton-company-transocean-ltd-eog-resources-inc-todays-worst-stock/.

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