Two Insiders Agree With Billionaire Dan Loeb on Weatherford

Weatherford’s pricing seems about even with many of its peers in the equipment and services side of the oil and gas business. Halliburton Company (NYSE:HAL), Baker Hughes Incorporated (NYSE:BHI), Schlumberger Limited. (NYSE:SLB), and National-Oilwell Varco, Inc. (NYSE:NOV) all have forward earnings multiples in the 10-14 range. So Weatherford is towards the lower end of that range, but as we’ve noted it has had some special charges recently so perhaps it makes sense to see a small discount especially against market leaders like Schlumberger. Of course it didn’t perform well on the bottom line either; while Baker Hughes and Halliburton saw their net income decline as well, Schlumberger and National Oilwell Varco each reported an increase in earnings versus a year earlier. Halliburton and Schlumberger also made our list of the most popular energy stocks among hedge funds for the third quarter of the year (find more energy stocks hedge funds love). Being tied to oil and gas activity, these stocks all have beta of at least 1.7 so none offers that much more downside protection, at least statistically, than Weatherford.

While there is consensus insider buying at Weatherford, the company doesn’t look particularly attractive relative to its peers. Some comparable companies are trading at similar forward valuations and either post a better market cap, better recent financial performance, or both. We’d keep the insider buying in mind but advise any interested investors to look at other stocks in the industry as well.