Should we Follow Tweedy Browne Into This Oilfield Service Stock? – Halliburton Company (HAL), Baker Hughes Incorporated (BHI), Schlumberger Limited.(SLB)

Page 1 of 2

Tweedy Browne, with more than $3.43 billion assets under management, is one of the most respected investment managers in the US. In the fourth quarter of 2012, it bought shares of Halliburton Company (NYSE:HAL), an oilfield service company. As of December 2012, it had more than 4.64 million shares in the company, accounting for 4.7% of its total portfolio. Let’s take a closer look to see whether or not we should follow Tweedy Browne into Halliburton.

Halliburton Company (NYSE:HAL)Business snapshot

Halliburton, founded in 1919, is the leading provider of oilfield services to major oil and gas companies globally, with two main business segments: Completion and Production segment, and Drilling and Evaluation segment. The company is considered the world’s biggest provider of hydraulic-fracturing services. In the past year, Halliburton has benefited from a fast growing demand in the pressure-pumping market in North America. Furthermore, in order to significantly reduce its carbon emission and safety concerns, the company has been offering customers a new kind of fracking fluid that uses only food-industry ingredients.

$17.38 billion, or 61% of total revenue, was generated from the Completion and Production segment, while the Drilling and Evaluation segment had around $11.12 billion in total revenue in 2012. The operating income of the Completion and Production segment was $3.14 billion, whereas Drilling and Evaluation generated nearly $1.68 billion in 2012 operating income. Halliburton Company (NYSE:HAL) maintained a diverse customer base as no single customers have accounted for more than 10% of its total consolidated revenue for the last 3 years.

A good growth company with a conservative balance sheet

Over the past five years, Halliburton has experienced decent growth in both its top line and bottom line. The revenue has increased from $18.28 billion in 2008 to $28.5 billion in 2012 while the EPS has risen from $1.70 to $2.84 in the same period. In addition, the operating cash flow has gone up consistently, from $2.67 billion to $3.65 billion. However, the free cash flow has fluctuated quite widely, in the range of $88 – $542 million. Investors might feel comfortable with the company’s conservative capital structure. As of December 2012, it had $15.67 billion in total stockholders’ equity, $2.48 billion in cash and only $4.8 billion in long-term debt.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

The 15 Most Murderous Countries in the World

10 Largest Colleges in the World: Bigger Isn’t Always Better

Comedians in Cars Getting Coffee: The 6 Comedians Seinfeld Needs to Interview

Easy Money: The 10 Most Successful Investors in the World Today

The 10 Most Deadly Diseases in the World Today

The 5 Most Expensive Luxury Motorhomes in the World

20 Largest Stock Exchanges in the World

6 Richest Painters In The World 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!