The shares of this energy company were recently upgraded by Bank of America to ‘Buy’. Growth estimates for the next five years are 20.4%.
Halliburton Company (HAL)
From Energy & Income Advisor
As part of our efforts to make Energy & Income Advisor more user-friendly, we’ve undertaken a simplification push, consolidating the three model portfolios into a single, actively managed strategy that includes specific position sizes.
The Active Portfolio will hold between 20 and 25 names, compared to more than 60 positions across its three predecessors. Our slimmed-down approach should make it easier for subscribers to focus on our best ideas, while an actively managed portfolio gives us the flexibility to scale positions up and down based on their shifting risk-reward profiles.
After all, there’s much more to investing than a simple Buy, Hold, or Sell rating; sometimes you want to take a partial profit on a big winner or reduce your exposure to a riskier position without blowing it out completely. Position sizing will also help to distinguish higher-risk fare that could be worth a nibble from higher-conviction ideas that offer more near-term upside.
Of course, the introduction of an actively managed portfolio requires more diligence on our part, which is why, going forward, each Energy & Income Advisor issue will include a portfolio discussion highlighting company-specific news and any adjustments to position sizing.
How did we construct the actively managed portfolio? We gave the highest weightings to the name on our Focus List—designated with the heart symbol—with oil-field services giant Halliburton Company (HAL) receiving the largest allocation.
The stock trades at an undemanding valuation relative to its peers and hasn’t received credit for its superior leverage to activity levels in US shale plays and recent market share gains internationally. As generalist portfolio managers grow more comfortable with oil prices and energy stocks, Halliburton’s share price should benefit from its position as the go-to name for exposure to the North American oil-field services market.
Halliburton rates a buy up to $60.
Peter Staas, Energy & Income Advisor, www.energyandincomeadvisor.com, 888-960-2759, May 21